Request By:
[NO REQUESTBY IN ORIGINAL]
Opinion
Opinion By: Albert B. Chandler III, Attorney General; James M. Ringo, Assistant Attorney General
Open Records Decision
The question presented here is whether the Revenue Cabinet's denial of the open records request of Timothy J. Eifler for a copy of the Kentucky Revenue Cabinet Protest and Appeals Guidelines was proper under the Open Records Act. For the reasons that follow, we find the Cabinet failed to offer sufficient proof to establish that the document was exempt from disclosure under an applicable provision of the Open Records Act and is therefore obligated to disclose the record.
In denying Mr. Eifler's request, the Cabinet, in its initial responses, relied upon KRS 61.878(1)(e) and the attorney-client privilege, pursuant to KRS 61.878(1)(l), KRS 421.210, KRS 422A.0503, KRE 503, KRS 447.154 and CR 26.02. In its response to Mr. Eifler's letter of appeal to this office, the Cabinet expanded its denial to include KRS 61.872(6).
To facilitate this office's review, the Cabinet furnished us with a copy of the record in question. That document was not disclosed to other parties, and has since been destroyed. KRS 61.880(2)(c); 40 KAR 1:030 Section 3.
The Cabinet's first argument is that the requested document is analogous to those records which are exempt from disclosure under KRS 61.878(1)(e), which exempts:
Public records which are developed by an agency in the conjunction with the regulation or supervision of financial institutions, including but not limited to, banks, savings and loan associations, and credit unions, which disclose the agency's internal examining or audit criteria and related analytical methods.
We have examined the document which gives rise to this appeal. Although we cannot disclose its contents, it can be generally characterized as a general summary of Revenue statutes, regulations, and policies and the uniform operating standards and procedures to be followed by Revenue employees to ensure fair and consistent handling of taxpayer protests and appeals. The document at issue does not contain, in our view, information that one would consider to be sensitive audit criteria or analytical methods of the Cabinet in handling taxpayer protests and appeals.
Keeping in mind the legislative mandate that all exceptions are to be narrowly construed and noting that KRS 61.878(1)(e) concerns records which are developed by an agency in conjunction with the regulation of financial institutions, the Cabinet, in analogizing the requested document to the audit criteria and analytical methods records exempt under KRS 61.878(1)(e), has expanded the application of that exemption beyond its intended scope.
The Cabinet's second argument is that the document is exempt under the attorney-client privilege. We believe that 98-ORD-179, and in particular the discussion at pages four through six of that decision, are controlling. A copy of 99-ORD-34 is attached hereto and incorporated by reference. We have been presented with no evidence that establishes that the requested document was prepared in the course of the attorney-client relationship, represents a communication by or to the client on a subject matter for which professional advice was sought, or has been handled in a confidential manner.
The Cabinet's third argument is that to make the document available to taxpayers would seriously undermine the agency's ability to effectively and fairly administer the tax laws. In its supplemental response to Mr. Eifler's letter of appeal, the Cabinet argued:
One negative aspect of disclosing this document will be to undermine the Cabinet's attempt to resolve disputes and collect taxes in a timely manner. Further, the Cabinet would be unduly burdened with the overwhelming task of constantly revising this document, thereby placing an unreasonable burden upon the Cabinet. KRS 61.872(6). The taxpayer would have an unfair advantage by having access to sensitive internal operating processes. Another negative aspect of disclosure is that the document will provide the taxpayer with the insight and ability to leverage the timing of tax liabilities in such a way that would greatly diminish the time value of funds (interest earning potential) which would greatly influence the Commonwealth's General Fund.
In order to comply with the Cabinet's mission statement, to administer the tax laws in a fair and impartial manner and to provide quality service to taxpayers, the Cabinet must be able to standardize and safeguard its internal protest and appeal procedures. The Cabinet has gone to great lengths to achieve these goals by statutorily issuing a bill of rights for taxpayers. The Kentucky Taxpayers' Bill of Rights (KRS 131.041) provides a detailed description of the protest and appeal process available to taxpayers exercising their rights pursuant to KRS 131.110.
The document at issue, styled "Kentucky Revenue Cabinet Protest And Appeals Guidelines," explains to the Cabinet employees that the purpose of the guidelines is to simplify and document the Cabinet's protest and appeals procedures for better understanding and consistent treatment throughout the Cabinet and to provide consistent service to all Kentucky taxpayers. As noted above, our review of the document does not reveal any Cabinet auditing criteria or analytical method of a particularly sensitive nature, the disclosure of which would undermine its ability to administer the tax laws. Moreover, the Cabinet does not explain how any specific provision of the document would bring about this result.
In our view, disclosure of this completed agency document will more likely "further the citizens' right to know what their government is doing" and inform taxpayers as to what uniform policies and procedures will govern the Cabinet's handling of a taxpayer's protest or appeal, rather than to undermine the Cabinet's ability to administer the tax laws. Zink v. Commonwealth, Ky. App., 902 S.W.2d 825, 829 (1994).Disclosure would also be consistent with the mandate of the Kentucky Taxpayers' Bill of Rights (KRS 131.041 - 131.081) and its application to taxpayers exercising their rights pursuant to KRS 131.110. Relevant to this issue is KRS 131.081(1), which provides:
The Cabinet shall develop and implement a Kentucky tax education and information program directed at new taxpayers, taxpayer and industry groups, and cabinet employees to enhance the understanding of and compliance with Kentucky tax laws, including the application of new tax legislation to taxpayer activities and areas of recurrent taxpayer noncompliance or inconsistency of administration.
Finally, the Cabinet argues that if it were required to disclose the document, it would be unduly burdened with the task of constantly revising the document and this constant revision would place an unreasonable burden upon the Cabinet, thus making the document exempt under KRS 61.872(6).
We have held that an agency may invoke KRS 61.872(6) to deny a request for public records, if release of those records would compromise a significant government interest, thereby necessitating an immediate revision of policy or practice so as to avoid the subversive use of the records, or information contained therein. 95-ORD-121. In assessing the invocation of this exemption, we stated, in 95-ORD-121:
If the agency can establish, by clear and convincing evidence, that an application for public records would place an unreasonable burden on it because the agency would be forced to overhaul an existing system each time the records were requested and released, it may properly invoke this provision. The clear and convincing standard which is built into this provision is sufficient, in our view, to discourage abuse by public agencies. In other words, the provision is expansive enough to authorize judicious use, where warranted, but narrow enough to prevent profligate use, where unwarranted.
The Cabinet has not established by clear and convincing evidence that disclosure of the document at issue would undermine the agency's ability to administer the tax laws, thus requiring constant revision of the document. We conclude that the document may not be withheld from disclosure under authority of KRS 61.872(6).
In summary, having failed to offer sufficient proof to establish that the document was exempt from disclosure under an applicable provision of the Open Records Act, we conclude the Cabinet is obligated to disclose the record. A copy of the document must be provided to Mr. Eifler upon prepayment of a reasonable copying charge.
A party aggrieved by this decision may appeal it by initiating action in the appropriate circuit court pursuant to KRS 61.880(5) and KRS 61.882. Pursuant to KRS 61.880(3), the Attorney General should be notified of any action in circuit court, but should not be named as a party in that action or in any subsequent proceeding.