The IRS had to pay a penalty for disclosing a couple’s tax information.
In spite of minimal damages the Service needed pay only $1,000 to each of them.
After the IRS audited the couple, an employee unintentionally mailed pages of the report detailing the proposed exam adjustments to an unrelated taxpayer in another state.
After the error was uncovered, the couple sued for the unauthorized disclosure of their return information. They admitted they didn’t suffer any actual damages from the disclosure, so they’re entitled to only $1,000 each in statutory damages.
The couple also sought punitive damages, but they were unable to prove that IRS’s actions were willful, reckless or grossly negligent, so it was a no go.
Minda, 2nd Cir.