Court Opinion

ID: 9482079
Source: CourtListenerOpinion
Date Created: 2023-08-05 08:39:43.466893+00
Date Added: 2024-06-11T17:48:45.133823
License: Public Domain

MAGILL, Circuit Judge,
concurring.
I concur with the results reached in the majority opinion. The signature block disclosed that the IRS investigation of Dr. Diamond was criminal in violation of 26 U.S.C. § 6103. This disclosure does not fall within the exception of 26 U.S.C. § 6103(k)(6) because revealing that the investigation was criminal was not necessary to obtain the requisite information. The IRS, however, interpreted 26 U.S.C. § 6103 in good faith, although erroneously, and thus is not liable for the disclosure under 26 U.S.C. § 7431(b).
I wish to emphasize that the investigation, involving the circular letter request*438ing information from Dr. Diamond’s patients, was amply justified. Water damage had destroyed almost all of Dr. Diamond’s records. Although Agent Jay attempted to use the “bank deposit” method to determine Dr. Diamond’s income, discrepancies between the bank records and the remaining records1 made it impossible to calculate Dr. Diamond’s correct income without requesting payment information from his patients.
I also wish to emphasize that the Internal Revenue Manual’s, requirement that the specific identifier be included in the signature block of a circular letter was a good faith interpretation of 26 U.S.C. § 6103. The Internal Revenue Manual specifically warns that “unnecessary embarrassment to the taxpayer should be avoided.” Internal Revenue Service, Internal Revenue Manual, Part 9 (Investigations), § 9324.2(2)(c) at 9-94.1.2 The IRS also instituted and followed procedures designed to prevent wrongful disclosures.3 The IRS’s failure to recognize that the identifier in the signature block would be a wrongful disclosure is understandable. The use of such an identifier is a common business practice that is improper only in rare circumstances such as when it unnecessarily discloses the nature of an IRS investigation.4
Therefore, I concur with the results reached by the majority.

. Although Dr. Diamond's patient cards for 1985 indicated that some patients had paid him in cash, little, if any, cash was deposited into his business account. Other payments had been deposited to Dr. Diamond’s personal bank account, but the names of some of those patients were not included in the patient cards. Some payments by check had been cashed and never deposited. Defendant's Statement of Undisputed Facts at 4-5.

. The Handbook for Special Agents also correctly interprets 26 U.S.C. § 6103(k)(6). See Internal Revenue Service, Internal Revenue Manual, Handbook for Special Agents, § 348.3 at 9781-112 (discussed in majority opinion, supra, at 9-10).

. An agent, before sending a circular letter such as the one used by Agent Jay, must get approval from the agent's supervisor to send a circular letter and get approval of the contents of the letter. Internal Revenue Service, Internal Revenue Manual, Handbook for Special Agents, § 347.2 at 9781-111. Agent Jay stated that a circular letter indicating the investigation was criminal in the body of the letter would not be approved by a supervisor. Deposition of Roger J. Jay at 92-93.

. It should be stressed here that a signature identifier indicating the signer is an agent with the IRS would not be a wrongful disclosure.