B. Materials Do Not Fall Within Scope of Statute

In addition to arguing, where possible, that a statute is not a valid Exemption 3 statute, you may challenge whether the material you requested falls within the scope of records that may be withheld under the statute.³⁹

At times, courts can interpret the scope of an Exemption 3 statute in a rather broad manner. For example, a court held that the CIA could withhold information about the legal fees it paid to private attorneys it had hired under two statutory provisions that it had previously held were Exemption 3 statutes.⁴⁰ A provision in the CIA Act addresses nondisclosure of the “organization, functions, names, official titles, salaries, or numbers of personnel employed by the Agency.”⁴¹ The court ruled that this provision covered information about the agency’s legal fees, as it related to the “salaries . . . of personnel employed by the agency.”⁴²

The court ruled that a provision in the National Security Act covered the information at issue as well, as the statute provides that “the Director of Central Intelligence shall be responsible for protecting intelligence sources and methods from unauthorized disclosure.”⁴³ The court held that the agency met its burden to show that “the amount of a legal fee could well prove useful for identifying a covert transaction.”⁴⁴ For example, the court noted, if the agency incurred “a large legal bill” in a covert operation, an intelligence analyst might be able to deduce the “size and nature of the operation.”⁴⁵

In contrast, a court held that IRS “letter rulings” — documents that provided written advice to taxpayers interpreting tax laws and their application to specific fact scenarios — did not fall within the scope of an Exemption 3 statute that protects against disclosure of certain tax return information.⁴⁶This statute bars the disclosure of “any income return, or any part thereof or source of income, profits, losses, or expenditures appearing in any income return.”⁴⁷ As the court noted, this statute protects “the privacy of taxpayers filing tax returns” and is “designed to prevent disclosure information contained either in the returns or in documents filed in conjunction therewith which enable the Secretary or his delegate to determine tax due the United States.”⁴⁸

However, the letter rulings did not fall within this statute, the court ruled, as they were issued to provide guidance to taxpayers “in planning and conducting their business affairs and, if the transaction is consummated, aids in preparation of their tax returns.”⁴⁹ While the taxpayers could choose to attach such letter rulings to their tax returns, the court found these letter rulings were not “part of a return,” but were instead interpretations of the law.⁵⁰

Therefore, where a statute may arguably constitute an Exemption 3 statute, you should argue that the information at issue is not covered by the relevant nondisclosure provision.