Levin: IRS Audit Templates Stayed Protected Despite Public ERC Guidance

Public ERC guidance did not require disclosure of internal IRS audit templates. In Levin v. IRS, No. 5:24-cv-00582-HNJ (N.D. Ala. Jan. 14, 2026), the court upheld withholding under FOIA Exemptions 7(A) and 7(E). It distinguished rules taxpayers can use to assess eligibility from internal questioning methods, investigative triggers and priorities whose disclosure could interfere with enforcement.

The request narrowed to nonpublic ERC examination materials

Tax attorney Michelle Levin requested internal guidance for employees evaluating Employee Retention Credit claims. Her October 2023 request excluded publicly available Internal Revenue Manual material. After suit and document productions, the request narrowed to non-taxpayer-specific counsel templates and training materials. The remaining dispute concerned portions withheld or redacted from internal examination records. Opinion, pages 1–7.

The IRS invoked work-product and law-enforcement exemptions. Levin did not challenge the adequacy of its search. The court found Exemptions 7(A) and 7(E) sufficient and did not need to decide Exemption 5. Describing the result as a ruling adopting every asserted exemption would overstate the decision.

Tax examinations supplied the law-enforcement connection

Exemption 7 first requires records compiled for law-enforcement purposes. Levin did not dispute that threshold, and the court also explained why civil tax examinations and materials guiding them qualified. The exemption was not confined to a criminal prosecution or to documents created during one specific investigation. Pages 8–10.

That threshold did not finish the analysis. The IRS still had to establish the particular protection asserted under the subdivisions it relied on. The court examined the agency’s declaration and the nature of the withheld material rather than treating the IRS’s identity alone as sufficient.

Exemption 7(A): The agency identified ongoing examinations and litigation

Exemption 7(A) protects qualifying information whose production could reasonably be expected to interfere with enforcement proceedings. The IRS declaration linked the templates to ongoing ERC examinations and refund litigation. It explained how disclosure would reveal the evidence, direction, focus and strategy of those proceedings. Pages 11–13.

Levin argued that the agency described a broad enforcement program rather than a sufficiently concrete proceeding. The court rejected the demand for a named taxpayer-specific investigation on this record. It considered both the declaration’s identification of pending matters and the reasonable prospect of further ERC examinations and refund cases. Pages 17–22.

The court distinguished authorities in which an agency merely imagined that information might bear on some future violation. Here, the declaration identified ongoing matters and explained the interference risk. The holding therefore should not be reduced to “any broad IRS program defeats disclosure.” Page 23.

Exemption 7(E): Questions and triggers could expose enforcement methods

The second exemption covered specified law-enforcement guidelines, techniques and procedures. The declaration identified instructions about questions to ask, records to request under particular circumstances, methods for identifying deficient claims and triggers for using those methods. The court found that disclosure could expose investigative priorities and permit circumvention, including allowing past violators to escape consequences. Pages 24–28.

Footnote 4 identified a circuit disagreement about the risk-of-circumvention requirement for techniques and procedures. The court did not choose a side because it found the IRS satisfied that requirement for the materials at issue anyway. That is a genuine unresolved legal question in the opinion, with an express reason it did not need resolution.

Public law and substantiation guidance did not reveal every internal method

Levin argued that the materials concerned legal analysis taxpayers needed for compliance rather than secret enforcement methods. The court examined the disclosed portions, including descriptions of applicable law, and found that the redactions concerned more specific application strategies and examination methods. It also distinguished the stricter standard in an older case involving a different FOIA exemption. Pages 29–31.

The argument that the credit was no longer claimable did not eliminate the risk: Existing claims remained under review, and examinations and refund litigation continued. Public eligibility materials and checklists gave taxpayers guidance without making the undisclosed methods universally known. Pages 32–34.

The result was a disclosure ruling, not an ERC eligibility decision

The court granted summary judgment for the IRS on the remaining disclosure dispute. It did not approve or disallow a business’s credit, resolve an examination or establish that every IRS manual is protected. The specific materials, declaration, claimed harm and applicable exemption drove the result.

For an employer with a pending claim, our ERC substantiation guide addresses the different task of assembling its own proof. For a disclosure dispute, compare the actual request, productions, redactions and agency explanation. The existence of public guidance and the entitlement to a particular internal record are related but separate questions.