ELR Citation: 42 ELR 20021
No(s). 992 (Fed. Cir. Jan 20, 2012)

The Federal Circuit, in a case involving an electronics manufacturer's challenge to excise taxes on the use of ozone depleting chemicals (ODCs), reversed a lower court decision ordering the IRS to disclose to the manufacturer its excise tax audits of other companies. After paying the excise tax for importing ODC-containing products under protest, the manufacturer sought a refund based on alleged flaws in the gas chromatography test performed by the government during the ODC audit. During discovery, the lower court compelled the government to turn over the audit tests and related information of non-party taxpayer entities similarly tested to help assess the validity and reliability of the test's methodology. But the discovery order violates the Internal Revenue Code's general prohibition against disclosure of tax return information. By requiring disclosure of private taxpayer information, the lower court's order was a clear abuse of discretion.