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Garbage-hauling giant Waste Management Inc. has filed a lawsuit in a D.C. federal court to compel the IRS to produce its 2017 tax files, including audit records. The company alleges that the agency has been unreasonably delaying the process, violating the Freedom of Information Act (FOIA).

IRS audit records lawsuit : Waste Management's FOIA Complaint

In the complaint filed Wednesday, Waste Management accuses the Internal Revenue Service of not fully complying with a public records request made in June 2023. According to Waste Management, the IRS's failure to adhere to FOIA's time limits constitutes wrongful withholding of records.

The 11-page complaint outlines extensive correspondence between Waste Management's attorneys and the IRS. Notably, the IRS informed Waste Management on June 10 that it had provided some documents through an electronic portal. However, when Waste Management accessed the portal, no documents were available, and subsequent requests for clarification went unanswered.

IRS's Delays and Incomplete Responses

Waste Management's records request is linked to the IRS's audit of its 2017 tax return and the company's appeal against a proposed adjustment to its taxable income for that year. The company requested its entire administrative file from both the IRS and its independent office of appeals.

Initially, the IRS indicated it would need until November to deliver the records and suggested that Waste Management narrow its request. Waste Management complied, yet the IRS postponed the delivery date, citing delays from a specific division. By January, the agency had agreed to a rolling release of documents, with a new target completion date of June 28.

On June 18, the IRS provided an interim response, releasing 172 pages of documents. Of these, 56 pages were fully withheld, and six pages were partially withheld.

Legal Implications and Next Steps

Under FOIA, the government must produce public records within 20 working days, or 30 days in unusual circumstances. Waste Management asserts that the requested materials are not exempt from public records law and that the IRS's delays have exhausted the company's administrative remedies, necessitating the lawsuit.

The complaint states that the IRS's actions have caused "irreparable harm" by depriving Waste Management of its right to public records.

Waste Management is represented by Rod Rosenstein and Abraham N. M. Shashy Jr. of King and Spalding, and Kenneth L. Harris of Harris Winick Harris. Counsel for the IRS was not available for comment, and the IRS declined to comment on the case.

IRS audit records lawsuit : Conclusion

Waste Management's legal battle highlights the challenges companies face when seeking transparency and compliance from federal agencies. The outcome of this case could set a significant precedent for how the IRS handles FOIA requests, especially regarding audit records.