CCH Tax Day Report
Various individuals’ claims that the IRS disclosed their return information when its “Get Transcript” online application was hacked were dismissed for failure to state a claim. The individuals argued that the failure of the IRS to properly secure the Get Transcript application was negligent and proximately caused the disclosure of their personal identifying information. However, Code Sec. 6103 does not authorize a suit based on a failure to protect, but only for improper disclosure of, such information. The individuals’ failure to safeguard claim was properly brought under the Privacy Act and their unauthorized disclosure claim was properly brought under Code Sec. 6103 because it provides a specific cause of action for individuals harmed by improper disclosure by the IRS. Moreover, the principles of sovereign immunity apply equally to federal agencies, officers and employees acting in their official capacity. This exemption from suit is expressed in jurisdictional terms; federal courts lack subject matter jurisdiction over suits against the government in the absence of a clear waiver of sovereign immunity. Therefore, the individuals’ attempt to conflate the two claims and extend Code Sec. 6103 to a cause of action for which sovereign immunity was not waived was rejected because a jury would have to decide whether the IRS failed to safeguard and then find that the failure was a negligent act that led to disclosure.
B. Welborn, DC D.C., 2016-2 ustc ¶50,459
Code Sec. 6103
CCH Reference – 2016FED ¶36,894.7708
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CCH Reference – TRC IRS: 66,360.05