The Internal Revenue Service recently requested a federal judge in the D.C. Circuit to dismiss a putative class action suit by taxpayers against the IRS for a data breach earlier this year that affected over 330,000 taxpayers. The IRS alleges that the court doesn’t have jurisdiction over the claims as the claims are preempted by the IRS Code, which allows taxpayers to seek relief against the IRS for unlawfully disclosing tax information. Further, the IRS claims that it is immune from liability under the doctrine of sovereign immunity.
Finally, the IRS alleged that the taxpayers do not have standing to sue the IRS as they have not alleged an actual injury.
The breach is alleged to have occurred when unauthorized individuals were able to use the IRS’s “Get Transcript” service to get copies of tax returns. The information breached included the taxpayers’ full tax transcript, demographic information, children’s and spouse’s Social Security numbers, W-2s, income and financial holdings.
The IRS claimed that the Get Transcript service has been taken down so it can’t be used against taxpayers in the future.
The IRS has not provided any relief to taxpayers who were victims of filing of fraudulent tax returns, such as fraud resolution or other mitigation, unlike its assistance to those affected by the OPM data breach.