JEFFERSON CITY — Missouri Attorney General Andrew Bailey has taken legal action against the Internal Revenue Service (IRS), filing a lawsuit due to the agency's alleged failure to comply with a Freedom of Information Act (FOIA) request.
Bailey's lawsuit centers on obtaining documents related to the IRS's handling of the Employee Retention Credit (ERC), a crucial economic relief measure designed to aid small business owners in Missouri during the COVID-19 pandemic.
The ERC was established by Congress under the CARES Act and subsequently amended, aiming to refund federal taxes to businesses that retained employees amidst the declared state of emergency in 2020 and 2021.
Attorney General Bailey asserts in the lawsuit that the IRS's decision to suspend this tax credit has severely impacted numerous Missouri businesses, exacerbating financial challenges caused by government-mandated lockdowns and supply chain disruptions.
"I will always fight for small business owners, who are vital to the success of our communities," Bailey said in a provided statement. "The Freedom of Information ACT is the conduit between the general public and the federal government that keeps citizens in the know about the powers that be"
Bailey said he will continue to fight for Missouri business owners.
"Joe Biden’s IRS is improperly withholding information," Bailey said. "It is illegal, and I will fight until I get answers for Missouri business owners."
Bailey noted that FOIA is essential in ensuring transparency between the government and its citizens.
The lawsuit was filed after initial demands for IRS records went unanswered and seeks to compel the IRS to disclose the requested documents promptly.
In his suit, he argues that the IRS's actions not only violate FOIA but also obstruct efforts to provide transparency and accountability in government operations.
The broader context underscores Bailey's concerns about federal agencies evading transparency obligations, suggesting a systemic issue of delay and non-compliance with FOIA requests.
"If federal agencies are allowed to sidestep requests by the AGO and avoid producing the requested documents, how can a citizen ever hope to cut through the ‘red tape’ and take advantage of the rights granted by FOIA?" the lawsuit states. "The actions of the IRS are only the tip of the iceberg and are emblematic of a larger pattern and practice of federal agencies using delay and diversion to avoid producing documents requested under FOIA. It is time for the games to end. Consequently, the State of Missouri brings this lawsuit to vindicate the rights granted by the federal FOIA statute."
By pursuing legal action, Bailey aims to hold the IRS accountable, ensuring that citizens, particularly small business owners in Missouri, receive the transparency and support mandated by law.
"The Attorney General has constructively exhausted applicable administrative remedies under FOIA because the IRS failed to meet FOIA’s statutory requirements on timing of document production," the complaint states. "The IRS has wrongfully withheld agency records. The Attorney General is entitled to declaratory and injunctive relief ordering the IRS to release and disclose the requested records."
Bailey is seeking a declaration that the IRS violated FOIA by failing to lawfully satisfy Bailey's original FOIA request and an order that the IRS produce records within 10 business days from the court's judgment.
U.S. District Court for the Eastern District of Missouri case number: 4:24-cv-00955