Court Opinion

ID: 9912171
Source: CourtListenerOpinion
Date Created: 2023-12-21 19:00:49.100315+00
Date Added: 2024-06-11T12:52:53.562579
License: Public Domain

Case: 23-10630         Document: 00517010163             Page: 1      Date Filed: 12/21/2023

              United States Court of Appeals
                   for the Fifth Circuit
                                      ____________
                                                                                United States Court of Appeals
                                                                                         Fifth Circuit
                                       No. 23-10630
                                     Summary Calendar                                  FILED
                                     ____________                              December 21, 2023
                                                                                  Lyle W. Cayce
   John Anthony Castro,                                                                Clerk

                                                                     Plaintiff—Appellant,

                                             versus

   United States of America,

                                                Defendant—Appellee.
                      ______________________________

                      Appeal from the United States District Court
                          for the Northern District of Texas
                                USDC No. 4:22-CV-16
                      ______________________________

   Before Jones, Smith, and Dennis, Circuit Judges.
   Per Curiam: *
          John Anthony Castro appeals the district court’s entry of summary
   judgment in favor of the United States of America on his claim that an Inter-
   nal Revenue Service (“IRS”) agent disclosed his confidential tax return in-
   formation in violation of 26 U.S. § 6103(a)(3). Because the district court

         _____________________
          *
              This opinion is not designated for publication. See 5th Cir. R. 47.5.
Case: 23-10630      Document: 00517010163          Page: 2    Date Filed: 12/21/2023

                                    No. 23-10630

   properly entered summary judgment in favor of the Government, we AF-
   FIRM.
          The standard of review on summary judgement is de novo. Davidson
   v. Fairchild Controls Corp. 882 F.3d 180, 184. (5th Cir. 2018). The court
   should grant summary judgment when “there is no genuine dispute as to any
   material fact and the movant is entitled to judgment as a matter of law.” FED.
   R. CIV. P. 56(a). During an IRS criminal investigation into Castro, criminal
   investigative agent Tuan Ma (“Agent Ma”) contacted two potential wit-
   nesses to obtain information in furtherance of his investigation. The parties
   dispute whether Agent Ma disclosed to the two potential witnesses that Cas-
   tro was under criminal investigation but that the investigation did not target
   the two potential witnesses. For the purpose of summary judgment, we as-
   sume that Agent Ma did in fact disclose such information to the two potential
   witnesses. McFaul v. Valenzuela, 684 F.3d 564, 571 (5th Cir. 2012) (“In re-
   viewing summary judgment, this court construes all facts and inferences in
   the light most favorable to the nonmoving party.”) (internal citation and quo-
   tation marks omitted). The two potential witnesses submitted affidavits indi-
   cating that they spoke with Agent Ma after he reassured them that they were
   not under investigation.
          Even accepting as true that Agent Ma made the alleged disclosures in
   violation of § 6103 of the Internal Revenue Code, a safe harbor provision
   shields the Government from liability if the agent’s disclosure was based on
   “a good faith, but erroneous, interpretation of section 6103[.]” 26 U.S.C. §
   7431(b)(1) (“No liability shall arise under this section with respect to any in-
   spection or disclosure . . . which results from a good faith, but erroneous,
   interpretation of section 6103[.]”). This circuit uses an objective standard to
   evaluate the applicability of this “good faith” exception to liability under the
   Internal Revenue Code. Payne v. United States, 289 F.3d 377, 384 (5th Cir.
   2002); see also Huckaby v. United States Dept. of Treasury, I.R.S., 794 F.2d

                                          2
Case: 23-10630      Document: 00517010163          Page: 3   Date Filed: 12/21/2023

                                    No. 23-10630

   1041, 1048 (5th Cir.1986) (“A reasonable IRS agent can be expected to know
   statutory provisions governing disclosure, as interpreted and reflected in IRS
   regulations and manuals.”).
          Here, Agent Ma reasonably and in good faith believed that—based on
   case law, statutory authority, regulations, and the IRS Manual (“IRM”)—
   the disclosures were “necessary in obtaining information, which was not oth-
   erwise reasonably available[.]” 26 U.S.C. § 6103(k)(6). Treasury Regulation
   § 301.6103(k)(6)-1 defines “necessary” as “appropriate and helpful” and
   clarifies that an agent is not required to first seek information from the tax-
   payer as an otherwise reasonably available source. TREAS. REG. §
   301.6103(k)(6)-1(c)(1) & (3). The IRM further instructs agents that they may
   identify themselves as members of the criminal investigation unit of the IRS
   and disclose the criminal nature of investigations when “necessary” because
   the witness is “disinclined to cooperate.” I.R.M. 9.4.5.11.3.1.4(1) (Note).
   Moreover, this circuit has stated that § 7431’s good faith exception protects
   an agent’s disclosure of “the nature of their official duties as a criminal tax
   investigation.” Gandy v. United States, 234 F.3d 281, 286–87 (5th Cir. 2000)
   (reasonable agents “had a good faith belief that they could disclose the crim-
   inal nature of the investigation”). Castro did not present any evidence sug-
   gesting that Agent Ma’s interpretation of the relevant authorities was unrea-
   sonable under these circumstances. Agent Ma’s disclosure thus fell within §
   7431(b)(1)’s “good faith” exception to Government liability.
          The judgment of the district court is AFFIRMED.

                                          3