What can happen if the IRS discloses your personal information? It depends. In one case, a taxpayer involved in a collection due process hearing fired her representative and hired a new one. The IRS sent the determination to the fired rep, rather than her new one and then proceeded with collection activity against her. She filed suit for unauthorized disclosure of information in a U.S. District Court. The tax law allows for the greater of $1,000 of statutory damages or actual damages plus punitive damages. The taxpayer failed to show actual injury, since no third party used her disclosed information to her detriment, but she was granted $1,000 in punitive damages. (Castillo, DC NY, 3/28/22)
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