Unauthorized Disclosure of Return Information: A Look at Damages.

Tax returns and the information that they contain are confidential under Section 6103 of the Internal Revenue Code. Improper disclosure of return information has serious consequences: it can result in criminal prosecution under Section 7213 of the Code, and there is also a civil damage remedy under Section 7431, which authorizes either statutory or actual damages, attorneys’ fees, and, for cases that involve gross negligence, punitive damages. I.R.C. § 7431(c).

A recent case arising from the IRS non-profit scandal provides an interesting look at the civil damage remedy. Citizens Awareness Project, Inc. v. IRS, 2015 U.S. Dist. LEXIS 59355 (D. Colo.… Read More