Paul L. Caron

Thursday, February 16, 2017

Woman Sues Howard Stern For Airing Her Phone Call With IRS Agent Discussing Her Taxes

HIRSRadio Ink, “Hello Howard, This Is the IRS …”:

In a fact pattern worthy of a law school exam question, an IRS employee calls the Howard Stern Show and is put on hold. The IRS employee on a different line, apparently either using fat fingers on a conference call feature, or on a speakerphone, takes a call from a taxpayer while on hold with Stern. The Howard Stern Show then picks up, hears the IRS employee talking with the taxpayer and puts the nearly hour-long conversation on the air live. The law school question is … in how many ways might the Howard Stern Show be civilly and criminally liable?

The question will likely be answered by the courts. The taxpayer has sued both the IRS for violations of the Federal Tort Claims Act and unlawful disclosure of tax returns and personal information, the Howard Stern Production Company, and Stern individually, for negligence, invasion of privacy, and the intentional infliction of emotional distress.

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This is a very interesting case. The FTCA claim will probably fail, although the question may turn to some extent on state tort law. See Johnson v. Sawyer, 47 F.3d 716 (5th Cir. 1995). The wrongful disclosure claim under 26 U.S.C. § 7431 seems like a slam dunk, although actual damages are probably limited to a single disclosure to the Stern show, rather than a multiple of his listening audience. Miller v. United States, 66 F.3d 220 (9th Cir. 1995). Note, however, that § 7431 is one of the rare federal statutes that provides for punitive damages–in these circumstances if the disclosure was the result of gross negligence. Unca Sam probably needs to get out his check book on this one!

Posted by: Publius Novus | Feb 16, 2017 7:12:29 AM

Was the IRS employee disciplined at all?

Posted by: Johann Amadeus Metesky | Feb 16, 2017 10:49:41 AM

Hopefully the government will take the funds out of the IRS jerk's retirement fund first.

Posted by: Sixty Ville | Feb 16, 2017 11:06:40 AM

Would readers familiar with the IRS please offer an opinion about whether or not the IRS employee will be disciplined in any way? Thanks!

Posted by: JohnOh | Feb 16, 2017 11:12:53 AM

Will the IRS agent be promoted to a higher position?

Posted by: pursang | Feb 16, 2017 11:37:07 AM

well, at least they weren't surfing for porn... :)

Posted by: ThewlynOh | Feb 16, 2017 11:42:30 AM

Aside from whether or not the IRS is punished, will the worker be fired? Holding the IRS accountable is worthless if the IRS doesn't hold its staff accountable. This is a lesson we know all too well.

Posted by: wodun | Feb 16, 2017 6:26:04 PM

taxation is theft anyhow. so there is that...fat fingered, the guy called Stern and conferences a taxpayer in to the call...just how does one fat finger a teleconference? why do we even need the IRS any longer?

Posted by: Fitzy | Feb 17, 2017 8:04:09 AM

1. The IRS will not be "punished," because it is not possible to punish an organization. Congress often cuts the IRS budget, and has done so repeatedly since 2010, in order to “punish” it for real or perceived misdeeds. Cutting the IRS budget does not “punish” the agency. What it does do is diminish the IRS’ ability to properly assess and collect the federal revenue, decrease customer service, and increase fraud–any and all of which adversely affect honest U.S. taxpayers, who become the real recipients of the “punishment.”
2. Under the wrongful disclosure statute (26 U.S.C. § 7431), the defendant is the United States. As a result, any judgment or settlement will be paid from the judgment fund. And of course, the money in the judgment fund is tax money, supplied by the U.S. taxpayer. Once again, the real recipient of the “punishment” is the U.S. taxpayer. This is particularly perverse when there are little or no actual damages, but there is a large punitive damage award. But see Siddiqui v. U.S., 359 F.3d 1200 (9th Cir. 2004) (denying punitive damages when no actual damages proven).
3. Discipline of the employee is subject to civil service rules and regs and the NTEU contract. Employee discipline generally is confidential because of the Privacy Act of 1974 (5 U.S.C. § 552a(b)). If the offending employee is a line auditor or revenue agent, there will be discipline. If a manager is involved, discipline is probably less likely to occur.

Posted by: Publius Novus | Feb 17, 2017 11:28:17 AM

"What it does do is diminish the IRS’ ability to..."

...allocate time, personnel, and resources to target for disperate treatment certain non-profit groups of a particular political orientation, coincidentally of course.

...violate taxpayers' and non-profit groups' privacy rights, also coincidentally on only one side of the political aisle.

...waste millions of dollars every year, while their budget is declining, on lavish "training seminars", including the production of a Star Trek parody video.

...slow-walk and stonewall Congressional investigations into IRS malfeasance, Freedom of Information Act lawsuits, etc.

Posted by: MM | Feb 17, 2017 5:30:33 PM

There lesson here is : do not multi-task.

Posted by: CPA Detective | Feb 17, 2017 5:52:05 PM