FOIA Exemption 3 and 26 U.S.C. § 6103 Bar Disclosure of Third-Party Tax Return Information Absent Consent (and Unobjected Magistrate Discovery Orders Are Waived on Appeal)

Introduction

In Checksfield v. Internal Revenue Serv., No. 24-2786 (2d Cir. Jan. 22, 2026) (summary order), the Second Circuit affirmed summary judgment for the Internal Revenue Service (“IRS”) in a Freedom of Information Act (“FOIA”) case where a requester sought third-party tax returns and/or “return information.” The case centered on whether FOIA compels disclosure notwithstanding the Internal Revenue Code’s strict confidentiality rule, and also addressed procedural constraints on appellate review where a litigant fails to object to a magistrate judge’s non-dispositive discovery rulings in the district court.

Parties: Kevin D. Checksfield (pro se) vs. Internal Revenue Service.
Key issues: (1) Whether the IRS properly withheld third-party tax returns/return information under FOIA Exemption 3 via 26 U.S.C. § 6103; (2) whether segregability and in camera review required disclosure of portions; (3) whether discovery was warranted; (4) whether Rule 60(b) relief was appropriate; (5) whether discovery challenges were waived for failure to object under Rule 72(a).

Summary of the Opinion

The Second Circuit affirmed the district court’s judgment and its September 23, 2024 order denying Rule 60(b) relief. It held that the IRS properly denied the FOIA request because FOIA Exemption 3 permits withholding where disclosure is barred by another statute, and 26 U.S.C. § 6103 mandates confidentiality of third-party “returns and return information” absent authorization/consent. The court further held that Checksfield waived appellate review of the magistrate judge’s discovery rulings by not seeking district court review, and that neither segregability nor in camera review overcame § 6103’s categorical confidentiality for the requested materials (including deductions).

Analysis

Precedents Cited

  • Spadaro v. U.S. Customs & Border Prot., 978 F.3d 34 (2d Cir. 2020)
    Used for (i) the de novo standard of review for grants of summary judgment in FOIA litigation, and (ii) the FOIA-summary-judgment framework: agency affidavits must justify nondisclosure with reasonably specific detail, show logical fit within an exemption, and not be undermined by contrary evidence or bad faith. Spadaro also supplies the two-part test for FOIA Exemption 3: the invoked statute must qualify, and the withheld material must fall within its scope.
  • Jabar v. U.S. Dep't of Just., 62 F.4th 44 (2d Cir. 2023)
    Cited for abuse-of-discretion review of denial of in camera review in FOIA matters, reinforcing that in camera inspection is discretionary.
  • Mandala v. NTT Data, Inc., 88 F.4th 353 (2d Cir. 2023)
    Cited for abuse-of-discretion review of Rule 60(b) motions, supporting the panel’s deference to the district court’s denial of post-judgment relief.
  • In re Agent Orange Prod. Liab. Litig., 517 F.3d 76 (2d Cir. 2008)
    Cited for abuse-of-discretion review of discovery rulings generally.
  • Caidor v. Onondaga County, 517 F.3d 601 (2d Cir. 2008)
    Central to the waiver holding: a pro se litigant who fails to object timely to a magistrate judge’s order on a non-dispositive matter waives appellate review even without express notice; tied to Fed. R. Civ. P. 72(a).
  • Long v. Off. of Pers. Mgmt., 692 F.3d 185 (2d Cir. 2012)
    Cited to emphasize FOIA practice: courts typically resolve summary judgment primarily on agency affidavits; agencies enjoy a presumption of good faith; discovery is generally unnecessary if submissions are facially adequate—supporting denial of Checksfield’s discovery efforts.
  • Green v. Dep't of Educ. of New York., 16 F.4th 1070 (2d Cir. 2021)
    Cited for the rule that issues not raised below generally cannot be raised for the first time on appeal—used to reject Checksfield’s new 42 U.S.C. § 1983 theory.
  • Breuhaus v. Internal Revenue Serv., 609 F.2d 80 (2d Cir. 1979)
    Key authority establishing (in this Circuit) that 26 U.S.C. § 6103 is an Exemption 3 withholding statute. The panel relied on Breuhaus to confirm the statutory “no discretion” confidentiality regime for returns and return information.
  • Halpern v. Fed. Bureau of Investigation, 181 F.3d 279 (2d Cir. 1999)
    Cited to underscore the “significant discretion” a district court has in deciding whether to conduct in camera review; the panel found no abuse of discretion in declining it here.

Legal Reasoning

  1. Procedural waiver of discovery challenges (Rule 72(a))
    The court began with the magistrate judge’s discovery rulings and held Checksfield waived appellate review by failing to seek review from the district court. Under Caidor v. Onondaga County and Fed. R. Civ. P. 72(a), objections to non-dispositive magistrate orders must be timely made to preserve review. The panel also noted that, even on the merits, discovery is typically unnecessary in FOIA cases where adequate agency declarations exist (Long v. Off. of Pers. Mgmt.).
  2. FOIA Exemption 3 + 26 U.S.C. § 6103
    Applying Spadaro v. U.S. Customs & Border Prot., the court evaluated Exemption 3 in two steps:
    • Qualifying statute: The court affirmed that 26 U.S.C. § 6103 qualifies as an Exemption 3 statute because it mandates confidentiality of “[r]eturns and return information” and leaves no discretion to disclose covered material (Breuhaus v. Internal Revenue Serv.).
    • Scope match: The IRS showed (via sworn declaration) that Checksfield sought third-party returns/return information and provided no authorization or consent. Because the request fell squarely within § 6103’s protected category, disclosure was prohibited “whether it acted in bad faith or not,” making the exemption dispositive.
  3. Rejection of alternative authorization theories
    Checksfield relied on 26 U.S.C. § 6103(i)(1)(A)(i), which permits disclosure pursuant to an ex parte order to certain federal officers/employees engaged in specified criminal investigations. The court agreed with the district court that the provision was irrelevant because Checksfield is not a federal employee.
  4. Segregability and “return information” (including deductions)
    Checksfield argued the court should order segregable portions released. The panel held the specific sought material—deductions—constitutes protected “return information” under § 6103(b)(2) (“deductions” expressly included), and therefore cannot be disclosed even if isolated.
  5. In camera review
    The panel held the district court did not abuse its discretion in declining in camera review (Halpern v. Fed. Bureau of Investigation; also reviewing standard cited from Jabar v. U.S. Dep't of Just.), given the categorical statutory bar and the agency’s declaration.
  6. Rule 60(b) relief
    The panel affirmed denial of Rule 60(b) relief, noting the motion largely reiterated prior arguments and did not approach the demanding threshold for post-judgment relief (Mandala v. NTT Data, Inc.).
  7. New claim on appeal
    The court rejected a newly asserted 42 U.S.C. § 1983 claim against an IRS employee because the claim was not raised below and the employee was not named as a defendant, invoking the general forfeiture rule in Green v. Dep't of Educ. of New York.

Impact

  • Practical reinforcement of § 6103 as a categorical confidentiality barrier in FOIA: The decision underscores that third-party tax returns and “return information” are not merely exempt in a discretionary sense; they are statutorily confidential, and FOIA cannot be used to bypass that regime absent authorization/consent or a specifically applicable statutory mechanism.
  • Limits on “segregability” where the entire category is protected: By treating deductions as protected “return information,” the order illustrates how segregability arguments fail when the desired fragments are still within § 6103’s definition.
  • Procedural discipline for FOIA litigants (including pro se parties): The waiver holding under Caidor v. Onondaga County is a cautionary point: failure to object to a magistrate judge’s non-dispositive rulings in the district court can foreclose appellate review.
  • Nonprecedential but informative: Because this is a Second Circuit “SUMMARY ORDER,” it “DO[ES] NOT HAVE PRECEDENTIAL EFFECT,” yet it provides a clear roadmap of how the Circuit applies settled FOIA/§ 6103 principles to third-party-return requests.

Complex Concepts Simplified

FOIA Exemption 3
A FOIA exemption that applies when another federal statute specifically requires withholding certain information. If the other statute leaves no discretion to disclose, FOIA cannot compel release.
26 U.S.C. § 6103 (“returns and return information shall be confidential”)
A tax-confidentiality law that broadly protects tax returns and related data (“return information”), generally prohibiting disclosure to the public without consent or a narrow statutory exception.
“Return information”
Defined in § 6103(b)(2) to include many details from a tax return, including a taxpayer’s “deductions.” Thus, even partial snippets may remain confidential.
Segregability
FOIA’s general requirement that agencies release any non-exempt portions of a record that can be reasonably separated from exempt portions. Segregability does not help when the requested portions are themselves exempt (or separately barred by a nondisclosure statute like § 6103).
In camera review
A judge’s private review of withheld records to verify an exemption claim. It is discretionary, often unnecessary when agency declarations and the law make the outcome clear.
Rule 60(b)
A mechanism to seek relief from a final judgment for limited reasons (e.g., mistake, newly discovered evidence, fraud). It is not a vehicle for re-arguing issues already decided.
Waiver under Fed. R. Civ. P. 72(a)
If a party does not timely object to a magistrate judge’s non-dispositive order before the district judge, appellate review is typically forfeited.

Conclusion

Checksfield v. Internal Revenue Serv. reaffirms two core points: (1) FOIA cannot be used to obtain third-party tax returns or “return information” where 26 U.S.C. § 6103 applies and no consent/authorization is provided; and (2) procedural preservation matters—even for pro se litigants—because failing to object to non-dispositive magistrate rulings under Rule 72(a) can waive appellate review. Although issued as a nonprecedential summary order, the decision consolidates settled doctrine into a clear, practical blueprint for how § 6103-driven Exemption 3 cases are resolved in the Second Circuit.