Academic journal article Journal of Accountancy

IRS Liable for Making Disclosures to Doctor's Patients

Academic journal article Journal of Accountancy

IRS Liable for Making Disclosures to Doctor's Patients

Article excerpt

Barrett, a plastic surgeon, was under civil investigation by the Internal Revenue Service. When a $100,000 discrepancy was revealed between Barrett's books and bank records, the IRS transferred the case to the criminal investigation division (CID).

The special agent conducting the CID investigation issued administrative summonses to the hospitals where Barrett had admitting privileges and obtained the names of 386 of his patients. The agent sent them form letters, asking how much they paid Barrett and whether they paid him in cash. The letters contained Barrett's name and address and the fact that the CID was investigating him--all items of "tax return information."

Barrett sued the IRS under Internal Revenue Code section 7431, which gives taxpayers the right to sue for a U.S. government employee's knowing or negligent disclosure of tax return information in violation of IRC section 6103. Section 6103 generally provides that tax returns and tax return information are to be kept confidential and outlines exceptions to the rule. …

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