Court Refuses to Seal Case Involving Government's Motion to Authorize Disclosure of Tax Returns
"The substantial public interests implicated by questions of the proper scope of Executive power and the statutory limits on access to tax information warrant public disclosure. While this case, and ... this decision, are now unsealed, the underlying Application and its supporting materials will remain under seal, at least while the investigation remains active ...."
From In the Matter of Application for Ex Parte Order to Authorize Disclosure of Tax Returns (N.D.N.Y.), decided yesterday by Judge Lorna Schofield (S.D.N.Y., sitting by designation):
On October 2, 2025, the United States Attorney's Office for the Northern District of New York (the "Government") applied for a court order directing the Internal Revenue Service to disclose tax return information (the "Application"). John A. Sarcone III authorized the Application as Acting United States Attorney for the Northern District of New York ("NDNY"). This request invokes 26 U.S.C. § 6103(i)(1)(A)(i), a statute that permits such disclosure [including disclosure within the Executive Branch] only under narrow, specified conditions. One critical condition is that only certain designated officials are authorized to make the request—the Attorney General, the Deputy Attorney General, the Associate Attorney General, Assistant Attorneys General, United States Attorneys and other officials not relevant here.
The Application is denied because Mr. Sarcone was not lawfully serving as Acting United States Attorney and therefore lacked authority to authorize the Application. [For more details, see this opinion from Judge Schofield, also handed down yesterday, and this story from CBS News (Jacob Rosen). -EV]
The Government's request to seal this matter is also denied. The substantial public interests implicated by questions of the proper scope of Executive power and the statutory limits on access to tax information warrant public disclosure. While this case, and with it, this decision, are now unsealed, the underlying Application and its supporting materials will remain under seal, at least while the investigation remains active, to protect law enforcement interests and the taxpayer's privacy interests, including the confidentiality of the taxpayer's identity and other sensitive information disclosed in the Application….
Requests under § 6103(i)(1) are by their nature ex parte—submitted without notice to the taxpayer or other interested parties—but courts still must decide whether such applications remain under seal. "The common law right of public access to judicial documents is firmly rooted in our nation's history … [but] is not absolute." Courts apply a three-part inquiry to determine whether, and to what extent, matters should remain under seal.
First, courts determine whether the relevant material is a "judicial document," meaning that the document is "relevant to the performance of the judicial function and useful in … a federal court's exercise of power under Article III of the Constitution." If so, courts next determine the weight of the presumption of public access based on "the role of the material at issue in the exercise of Article III judicial power" and the "value of such information to those monitoring the federal courts." Finally, courts balance that presumption against any countervailing interests, including "the danger of impairing law enforcement or judicial efficiency and the privacy interests of those resisting disclosure." …