24FC:0017 Latrice Lacey/City of Davenport - Probable Cause Report

Date:
10/17/2024

Subject:
Latrice Lacey/City of Davenport  - Probable Cause Report

Opinion:

The Iowa Public Information Board

COMES NOW, Erika Eckley, Executive Director for the Iowa Public Information Board (IPIB), and enters this Probable Cause Report: 

On February 12, 2024, Latrice Lacey filed formal complaint 24FC:0017, alleging the City of Davenport (“City”) violated Iowa Code chapter 22. On March 21, 2024, IPIB accepted the Complaint. The original complaint focused on the City’s failure to recognize Lacey’s request because she is the Director of the Davenport Civil Rights Commission (DCRC). The DCRC is a commission established by the City. 

Facts

After acceptance, the City responded through counsel and retracted its argument that Lacey was not able to make the records request because of her position with the City. The City also provided the requested records. In the meantime, Lacey had requested additional records requests be included in the City’s response. The City complied with these as well.

One request was for W-2s for specific City employees for certain years. The City requested $80 for the time and effort in retrieving, reviewing, and redacting the W-2s. IPIB suggested the City could provide other documents that would have the compensation information sought that could be provided at no charge, but Lacey insisted on receiving the W-2 documents.

The City provided the records, with redactions of all information except the employee’s name and the compensation listed in Box 1.[1] In addition, the City provided a document showing the benefits available to the employees, such as health insurance and retirement accounts.

Lacey objected to the redactions arguing Iowa Code § 22.7(11)(a)(1) requires disclosure of “[t]he name and compensation of the individual including any written agreement establishing compensation or any other terms of employment excluding any information otherwise excludable from public information pursuant to this section or any other applicable provision of law. For purposes of this paragraph, ‘compensation’ means payment of, or agreement to pay, any money, thing of value, or financial benefit conferred in return for labor or services rendered by an official, officer, or employee plus the value of benefits conferred including but not limited to casualty, disability, life, or health insurance, other health or wellness benefits, vacation, holiday, and sick leave, severance payments, retirement benefits, and deferred compensation.”

The City reviewed the records again and provided the records with unredacted Boxes 3[2] and 5.[3] These boxes show the total compensation to be considered for federal Medicare and Social Security Insurance taxes.

Lacey argues Iowa Code § 22.7(11)(a)(1) requires more information be unredacted from the W-2. 

Law

“The name and compensation of the individual including any written agreement establishing compensation or any other terms of employment excluding any information otherwise excludable from public information pursuant to this section or any other applicable provision of law. For purposes of this paragraph, ‘compensation’ means payment of, or agreement to pay, any money, thing of value, or financial benefit conferred in return for labor or services rendered by an official, officer, or employee plus the value of benefits conferred including but not limited to casualty, disability, life, or health insurance, other health or wellness benefits, vacation, holiday, and sick leave, severance payments, retirement benefits, and deferred compensation.” Iowa Code § 22.7(11)(a)(1).

Analysis

Iowa Code § 22.7(11)(a)(1) requires disclosure of the total compensation paid to a public employee or any other terms of employment, but it specifically excludes, “any information otherwise excludable from public information pursuant to this section or any other applicable provision of law.” (emphasis added) In order to determine whether the City has properly redacted confidential information, it is important to look at the confidentiality provisions of state and federal tax laws.

Tax information is personal information and once submitted with a tax return, the W-2 becomes part of the tax return information, which is confidential under federal statute.

IRS regulations provide:

(a) General rule. – Returns and return information shall be confidential, and except as authorized by this title – . . . . (2) no officer or employee of any State . . .  shall disclose any return or return information obtained by him in any manner . . . . 26 U.S.C. §6103(a) (emphasis added). Section 6103(b) of the Internal Revenue Code defines “return” and “return information,” in pertinent part, as follows: (1) Return. The term “return” means any tax or information return. . . required by . . . the provisions of this title which is filed with the Secretary by . . . any person . . . including supporting . . . attachments . . . . (2) Return information. The term “return information” means – (A) a taxpayer’s identity, the nature, source, or amount of his income, payments, receipts, deductions, exemptions, credits . . . tax withheld . . . or any other data, received by, recorded by, prepared by, furnished to, or collected by the Secretary with respect to a return . . . .

Office of the Budget v. Campbell, No. 1745 C.D. 2010 (Commonwealth Court of Pennsylvania, Jan. 21, 2011) (quoting 26 U.S.C. §6103(b)).

Iowa Code § 421.6 has a similar definition[4] and a similar confidential requirement for personal tax returns under Iowa Code § 422.20.

There is nothing in either state or federal law specifically prohibiting a public employer from releasing a W-2 prior to the individual’s utilizing the W-2 to file their federal and state income taxes, but there is no doubt a W-2 contains highly person financial information. Revealing this information directly or indirectly likely would disclose such personal, confidential information, such as whether the person is married, single or has a family and personal retirement savings and other financial decisions. 

At least one state has determined W-2s are not public records based on the confidentiality of tax returns, finding a W-2 is confidential return information.[5]

Because the City has provided redacted W-2’s including the compensation paid (and reported to the IRS and Iowa Department of Revenue), it is not necessary to determine whether a W-2 is a confidential document. It is only necessary to determine whether the City improperly withheld information it had a requirement to disclose. 

If “a statutory exemption does not articulate precisely what records or information the legislature considers private, courts commonly apply the following factors as a means of weighing individual privacy interests against the public's need to know: (1) the public purpose of the party requesting the information; (2) whether the purpose could be accomplished without the disclosure of personal information; (3) the scope of the request; (4) whether alternative sources for obtaining the information exist; and (5) the gravity of the invasion of personal privacy.” Clymer v. City of Cedar Rapids, 601 N.W.2d 42, 45 (Iowa 1999) (citing DeLaMater v. Marion Civil Serv. Comm'n, 554 N.W.2d 875, 879 (Iowa 1996)).

(1) the public purpose of the party requesting the information and (2) whether the purpose could be accomplished without the disclosure of personal information

The public purpose for requesting the information is to determine the compensation of a public employee. The legislature, in Iowa Code § 22.7(11)(a)(1) has specified this is information that is public and required to be provided. The compensation paid to a public employee by a government body employer is not confidential information.

The specific factors that impact this particular matter are the last three.

(3) the scope of the request; (4) whether alternative sources for obtaining the information exist; and (5) the gravity of the invasion of personal privacy.

In this particular instance, the specific concern lies in how much personal financial information must be shared in response to a request for a W-2. The City provided highly redacted W-2s revealing the employee’s name and the total compensation paid to the employee. All other information was redacted. In responding to the request, the City also provided information about what benefits the employees were also entitled to receive. The City was also willing to provide other records that would outline compensation paid. There is no need to rely on W-2 documents to collect the compensation information. If the W-2 was not redacted, financial information would be disclosed potentially revealing private information, such as the marital status of an employee or whether their spouse worked, if there are children, etc. These are private, confidential matters of the employee and should not be revealed. In fact, Iowa Code § 22.7(11)(a) states “[p]ersonal information in confidential personnel records of government bodies relating to identified or identifiable individuals who are officials, officers, or employees of the government bodies” is confidential. (emphasis added). W-2s are documents prepared for individuals and the information included is personal and identifiable. Aside from the name of the employee and the compensation received, no other information in a W-2 is public information under Iowa Code § 22.7(11) and should not be disclosed. 

In this case, all information was properly redacted.

Conclusion

Following acceptance of the original complaint, the City retracted its argument and provided all public record documents to Lacey based on the original request. Lacey requested additional record requests be included in the resolution of the original Complaint. One of the requests was for W-2s of certain public employees. The City provided information regarding the total compensation of the individual as stated on the W-2. Requiring any additional financial information be unredacted from the W-2 would require providing information that is otherwise confidential tax information under federal and state law and would include confidential personal information from identified individuals.

Recommendation

Based on investigation of the complaint, I recommend that the Board Dismiss the matter for lack of probable cause to believe a violation has occurred. Once the Board made clear the legal interpretation by the City was not accepted, the City retracted its argument and provided the requested records. Further, the City responded to the additional requests by Lacey. The W-2s provided were not improperly redacted.

By the IPIB Executive Director

_________________________

Erika Eckley, J.D.
 

[1] Includes the “total taxable wages, tips, and other compensation that you paid to your employee during the year. However, do not include elective deferrals (such as employee contributions to a section 401(k) or 403(b) plan) except section 501(c) (18) contributions.”  Department of Internal Revenue Service, General Instructions for Forms W-2 and W-3, 2024 available at https://www.irs.gov/pub/irs-pdf/iw2w3.pdf.

https://www.irs.gov/pub/irs-pdf/iw2w3.pdf

[2] The “total wages paid (before payroll deductions) subject to employee social security tax but not including social security tips and allocated tips.” Department of Internal Revenue Service, General Instructions for Forms W-2 and W-3, 2024 available at https://www.irs.gov/pub/irs-pdf/iw2w3.pdf.

https://www.irs.gov/pub/irs-pdf/iw2w3.pdf.

[3] The “wages and tips subject to Medicare tax are the same as those subject to social security tax (boxes 3 and 7) except that there is no wage base limit for Medicare tax.” Id.

[4] For purposes of this Title, unless the context otherwise requires, “return” means any tax or information return, amended return, declaration of estimated tax, or claim for refund that is required by, provided for, or permitted under, the provisions of this Title or section 533.329, and which is filed with the department by, on behalf of, or with respect to any person. “Return” includes any amendment or supplement to these items, including supporting schedules, attachments, or lists which are supplemental to or part of the filed return. Iowa Code § 421.6.

[5] Office of the Budget v. Campbell, No. 1745 C.D. 2010 (Commonwealth Court of Pennsylvania, Jan. 21, 2011).