Kenneth Griffin, a billionaire entrepreneur and investor, recently filed a lawsuit against the Internal Revenue Service, claiming that the agency unlawfully disclosed confidential information on his tax return to Pro Publica, an investigative journalism publication, resulting in a violation to his right to privacy.
Pro Publica then published his income and tax records in an article about tax returns of the wealthiest Americans.
His complaint alleges a “willful and intentional failure to establish appropriate administrative, technical, and/or physical safeguards over its records system to insure the security and confidentiality of Mr. Griffin’s confidential tax return information.” The complaint also allege certain IRS personnel exploited this lack of appropriate safeguards to provide the information to Pro Publica. Griffin seeks damages of, among other things, $1,000 for each unauthorized disclosure of his tax return information, including subsequent disclosure.
Duty to Protect Confidential Information
Although it’s not clear what will happen with this lawsuit, the IRS does have a duty to protect confidential information under IRS Publication 1, which states:
“The Right to Confidentiality. Taxpayers have the right to expect that any information they provide to the IRS will not be disclosed unless authorized by the taxpayer or by law. Taxpayers have the right to expect appropriate action will be taken against employees, return preparers and others who wrongfully use or disclose taxpayer return information.”
Also, there are severe consequences for an IRS employee who discloses confidential information. Such an employee is subject potentially to being fired, a $10,000 fine and five years in federal prison if found guilty.
According to Michael Gregory, a former IRS employee, the agency takes confidentiality seriously and educates its employees every year about unauthorized access, confidentiality and other requirements.