26 USC 7431 - Civil damages for unauthorized inspection or disclosure of returns and return information

U.S Code last checked for updates: Nov 25, 2024

§ 7431.

Civil damages for unauthorized inspection or disclosure of returns and return information

(a)

In general

(1)

Inspection or disclosure by employee of United States

(2)

Inspection or disclosure by a person who is not an employee of United States

(b)

Exceptions

No liability shall arise under this section with respect to any inspection or disclosure—

(1)

which results from a good faith, but erroneous, interpretation of section 6103, or

(2)

which is requested by the taxpayer.

(c)

Damages

In any action brought under subsection (a), upon a finding of liability on the part of the defendant, the defendant shall be liable to the plaintiff in an amount equal to the sum of—

(1)

the greater of—

(A)

$1,000 for each act of unauthorized inspection or disclosure of a return or return information with respect to which such defendant is found liable, or

(B)

the sum of—

(i)

the actual damages sustained by the plaintiff as a result of such unauthorized inspection or disclosure, plus

(ii)

in the case of a willful inspection or disclosure or an inspection or disclosure which is the result of gross negligence, punitive damages, plus

(2)

the costs of the action, plus

(3)

in the case of a plaintiff which is described in section 7430(c)(4)(A)(ii), reasonable attorneys fees, except that if the defendant is the United States, reasonable attorneys fees may be awarded only if the plaintiff is the prevailing party (as determined under section 7430(c)(4)).

(d)

Period for bringing action

(e)

Notification of unlawful inspection and disclosure

If any person is criminally charged by indictment or information with inspection or disclosure of a taxpayer’s return or return information in violation of—

(1)

paragraph (1) or (2) of section 7213(a),

(2)

section 7213A(a), or

(3)

subparagraph (B) of section 1030(a)(2) of title 18, United States Code,

the Secretary shall notify such taxpayer as soon as practicable of such inspection or disclosure. The Secretary shall also notify such taxpayer if the Internal Revenue Service or a Federal or State agency (upon notice to the Secretary by such Federal or State agency) proposes an administrative determination as to disciplinary or adverse action against an employee arising from the employee’s unauthorized inspection or disclosure of the taxpayer’s return or return information. The notice described in this subsection shall include the date of the unauthorized inspection or disclosure and the rights of the taxpayer under such administrative determination.

(f)

Definitions

(g)

Extension to information obtained under section 3406

For purposes of this section—

(1)

any information obtained under section 3406 (including information with respect to any payee certification failure under subsection (d) thereof) shall be treated as return information, and

(2)

any inspection or use of such information other than for purposes of meeting any requirement under section 3406 or (subject to the safeguards set forth in section 6103) for purposes permitted under section 6103 shall be treated as a violation of section 6103.

For purposes of subsection (b), the reference to section 6103 shall be treated as including a reference to section 3406.

(h)

Special rule for information obtained under section 6103(k)(9)

(Added Pub. L. 97–248, title III, § 357(a), Sept. 3, 1982, 96 Stat. 645; amended Pub. L. 98–67, title I, § 104(b)

cite as: 26 USC 7431