Abstract
A government must have revenue to exist, and a government the size of the present-day United States government requires a staggering amount of revenue. As the revenue assessing and collecting branch of the government, the Internal Revenue Service performs the crucial function of ensuring the steady and continuous flow of revenue. To enable it to perform this function, Congress and the courts have granted the Service broad powers of investigation and seizure that are denied most other law enforcement agencies by statutory and constitutional safeguards, and have generally shielded the Service from accountability to the taxpayers involved or to any other authority.
In 1976, however, Congress began enacting legislation intended to ensure the proper exercise by the Service of its extensive powers, and to prevent the misuse of the massive database that the Service has constructed on American taxpayers. Given the ever-expanding use of the tort system in the United States as a means of private law enforcement, it is not surprising that one of the tools chosen by Congress to police the Service was the taxpayer lawsuit for damages against the federal government. This Article will focus on two provisions, section 7431 (and its substantive base, section 6103) and section 7433, in which Congress established this method of accountability.
Ideally, from the taxpayers' point of view, the statutes should cover the continuum of Internal Revenue Service activity, allowing the recovery of damages for injuries sustained as a result of any improper exercise of the Service's powers. In fact, however, the statutes leave large, and again from the taxpayers' point of view, unjustifiable, gaps in the coverage. These gaps, together with pending legislation designed to address some of these gaps are also discussed.
In analyzing these provisions, or any other legislation that purports to place significant limitations on the powers of the Service, one fact must be kept in mind: If the constant flow of revenue to the government stops, the government stops as well. Despite all the speechmaking and posturing and even, perhaps, sincere concerns about the need to curb abuses by the Service, the government cannot afford to enact legislation that would significantly interfere with the Service's enforcement of the tax laws or interrupt the constant flow of revenue into the government coffers.
Recommended Citation
R. Tracy Sprouls,
IRC §§ 7431 and 7433: Civil Remedies for Abusive Practices by the IRS,
1 Fla. Tax Rev.
(1994).
Available at: https://scholarship.law.ufl.edu/ftr/vol1/iss1/14