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Tax Coda

Court protects IRS AI audit methods but requires justification for withholding entire records

Tax Analysts v. Internal Revenue Service. United States District Court for the District of Columbia. No. 25-cv-1409 (CRC).

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Tax Coda
Oct 19, 2026
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The IRS gets to keep its AI audit-selection secrets, but it still has to explain why it can’t hand over the parts of its records that aren’t actually secret.

Holding

The U.S. District Court for the District of Columbia ruled that the IRS properly invoked Freedom of Information Act (FOIA) Exemption 7(E) to protect information about its artificial intelligence (AI) audit-selection methods.

But the IRS couldn’t convince the court it deserved a total blackout. It didn’t show why it couldn’t just black out the sensitive bits and release the rest.

So Judge Cooper split the difference. The IRS gets partial credit, but now has homework: show your work if you want to keep everything under wraps.

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