PRIA, Government Policy, Made Personal

Summary

Lets a taxpayer sue if a federal employee or any other person looks at or shares the taxpayer’s tax return or tax information in ways that break section 6103 (and for non-employees also section 6104(c)). The taxpayer can sue the United States for actions by a federal officer or employee, or sue the person directly if they are not a federal employee. There are two exceptions: no liability if the action came from a good-faith but incorrect reading of section 6103, or if the taxpayer asked for the information. If the court finds the defendant liable, the defendant must pay either $1,000 for each wrongful inspection or disclosure or the actual harm caused (whichever is larger). If the action was willful or grossly negligent, punitive damages can be added. The defendant also must pay the case costs and, in some cases, reasonable attorney fees; if the defendant is the United States, fees are allowed only if the plaintiff is the prevailing party as defined in section 7430(c)(4). A suit must be filed within 2 years after the plaintiff discovers the unauthorized inspection or disclosure. If someone is criminally charged under 26 U.S.C. 7213(a)(1) or (2), 7213A(a), or 18 U.S.C. 1030(a)(2)(B), the Secretary must tell the affected taxpayer as soon as possible. The Secretary must also tell the taxpayer if the IRS or a federal or state agency proposes disciplinary action against an employee for an unauthorized inspection or disclosure. The terms “inspect,” “return,” and “return information” use the meanings in section 6103. Information from section 3406 is treated as return information, and misuse of it is treated as a section 6103 violation. For this section, references to section 6103 also include section 6311(e).

Title 26, §7431

Internal Revenue Code, Source: USLM XML via OLRC

(a)In general

(1)Inspection or disclosure by employee of United States

If any officer or employee of the United States knowingly, or by reason of negligence, inspects or discloses any return or return information with respect to a taxpayer in violation of any provision of section 6103, such taxpayer may bring a civil action for damages against the United States in a district court of the United States.

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

If any person who is not an officer or employee of the United States knowingly, or by reason of negligence, inspects or discloses any return or return information with respect to a taxpayer in violation of any provision of section 6103 or in violation of section 6104(c), such taxpayer may bring a civil action for damages against such person in a district court of the 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)

(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

Notwithstanding any other provision of law, an action to enforce any liability created under this section may be brought, without regard to the amount in controversy, at any time within 2 years after the date of discovery by the plaintiff of the unauthorized inspection or disclosure.

(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)

(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

For purposes of this section, the terms “inspect”, “inspection”, “return”, and “return information” have the respective meanings given such terms by section 6103(b).

(g)Extension to information obtained under section 3406

For purposes of this section

(1)

(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)

For purposes of this section, any reference to section 6103 shall be treated as including a reference to section 6311(e).

Notes & Related Subsidiaries

Editorial Notes

Prior Provisions

A prior section 7431 was renumbered section 7437 of this title.

Amendments

2019—Subsec. (e). Pub. L. 116–25 inserted at end of concluding provisions “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.” 2006—Subsec. (a)(2). Pub. L. 109–280, which directed insertion of “or in violation of section 6104(c)” after “6103” in subsec. (a)(2) of section 7431, without specifying the act to be amended, was executed by making the insertion in subsec. (a)(2) of this section, which is section 7431 of the Internal Revenue Code of 1986, to reflect the probable intent of Congress. 1998—Subsec. (c)(2). Pub. L. 105–206, § 3101(f), substituted “, plus” for the period at end. Subsec. (c)(3). Pub. L. 105–206, § 3101(f), added par. (3). Subsecs. (g), (h). Pub. L. 105–206, § 6012(b)(3), redesignated subsec. (g), relating to special rule for information obtained under section 6103(k)(8), as (h), and substituted “(9)” for “(8)” in heading. 1997—Pub. L. 105–35, § 3(d)(4), inserted “inspection or” before “disclosure” in section catchline. Subsec. (a)(1), (2). Pub. L. 105–35, § 3(a)(1), (2), substituted “Inspection or disclosure” for “Disclosure” in headings and “inspects or discloses” for “discloses” in text. Subsec. (b). Pub. L. 105–35, § 3(c), amended subsec. (b) generally. Prior to amendment, subsec. (b) read as follows: “(b) No Liability for Good Faith but Erroneous Interpretation.—No liability shall arise under this section with respect to any disclosure which results from a good faith, but erroneous, interpretation of section 6103.” Subsec. (c)(1). Pub. L. 105–35, § 3(d)(1), (2), inserted “inspection or” before “disclosure” in subpars. (A) and (B)(i) and substituted “willful inspection or disclosure or an inspection or disclosure” for “willful disclosure or a disclosure” in subpar. (B)(ii). Subsec. (d). Pub. L. 105–35, § 3(d)(1), inserted “inspection or” before “disclosure”. Subsec. (e). Pub. L. 105–35, § 3(b), added subsec. (e). Former subsec. (e) redesignated (f). Subsec. (f). Pub. L. 105–35, § 3(b), (d)(3), redesignated subsec. (e) as (f) and amended it generally. Prior to amendment, subsec. (f) read as follows: “(f) Return; Return Information.—For purposes of this section, the terms ‘return’ and ‘return information’ have the respective meanings given such terms in section 6103(b).” Subsec. (g). Pub. L. 105–35, § 3(b), (d)(6), redesignated subsec. (f) as (g) and substituted “any inspection or use” for “any use” in par. (2). Pub. L. 105–34, § 1205(c)(2), added subsec. (g) relating to special rule for information obtained under section 6103(k)(8). 1983—Subsec. (f). Pub. L. 98–67 added subsec. (f).

Statutory Notes and Related Subsidiaries

Effective Date

of 2019 Amendment Pub. L. 116–25, title III, § 3002(b),

July 1, 2019, 133 Stat. 1015, provided that: “The amendment made by this section [amending this section] shall apply to determinations proposed after the date which is 180 days after the date of the enactment of this Act [

July 1, 2019].”

Effective Date

of 2006 AmendmentAmendment by Pub. L. 109–280 effective Aug. 17, 2006, but not applicable to requests made before such date, see section 1224(c) of Pub. L. 109–280, set out as a note under section 6103 of this title.

Effective Date

of 1998 AmendmentAmendment by section 3101(f) of Pub. L. 105–206 applicable to costs incurred more than 180 days after July 22, 1998, see section 3101(g) of Pub. L. 105–206, set out as a note under section 7430 of this title. Amendment by section 6012(b)(3) of Pub. L. 105–206 effective, except as otherwise provided, as if included in the provisions of the Taxpayer Relief Act of 1997, Pub. L. 105–34, to which such amendment relates, see section 6024 of Pub. L. 105–206, set out as a note under section 1 of this title.

Effective Date

of 1997

Amendments

Pub. L. 105–35, § 3(e), Aug. 5, 1997, 111 Stat. 1106, provided that: “The

Amendments

made by this section [amending this section] shall apply to inspections and disclosures occurring on and after the date of the enactment of this Act [Aug. 5, 1997].” Amendment by Pub. L. 105–34 effective on the day 9 months after Aug. 5, 1997, see section 1205(d) of Pub. L. 105–34, set out as a note under section 6103 of this title.

Effective Date

of 1983 AmendmentAmendment by Pub. L. 98–67 effective Aug. 5, 1983, see section 110(c) of Pub. L. 98–67, set out as a note under section 31 of this title.

Effective Date

Pub. L. 97–248, title III, § 357(c), Sept. 3, 1982, 96 Stat. 646, provided that: “The

Amendments

made by this section [enacting this section and repealing section 7217 of this title] shall apply with respect to disclosures made after the date of enactment of this Act [Sept. 3, 1982].”

§7431 Civil Damages for Unauthorized Inspection or Disclosure of Returns and Return Information

Summary

Title 26, §7431

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Prior Provisions

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Citations & Metadata