Arden Row Assets, LLC v. IRS (D.D.C) -- finding that: (1) IRS properly withheld records of plaintiffs’ 2018 tax audits under the deliberative process privilege; rejecting plaintiffs’ argument that a “legally harmless” act of backdating records triggered a government misconduct exception, which the D.C. Circuit has never recognized; further noting that such an exception would apply only to "extreme” and “nefarious” misconduct, whereas the agency’s behavior was “more easily ascribed to ‘incompetence’”; (2) IRS properly withheld records under the attorney-client privilege and plaintiff failed to show that the crime-fraud exception applied, because the agency’s backdating was not illegal and there was no evidence of fraudulent intent; further, plaintiff forfeited its argument that the IRS committed subject-matter waiver of the attorney-client privilege by raising it for the first time in their reply brief, and in any event the disputed records were independently protected by the deliberative process privilege; and (3) IRS properly invoked Exemption 3 in conjunction with 26 U.S.C. § 6103(e)(7) to withhold tax return information whose release could impair federal tax administration; and (4) IRS correctly relied on Exemption 7(A) to protect records related to Arden Row’s ongoing Tax Court proceedings, as disclosure could interfere with enforcement by revealing the IRS’s strategies, evidence, and focus.
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