In
Aloe Vera of America, Inc. v. United States, 699 F.3d 1153 (9th Cir. 2012),
here, the Ninth Circuit addressed the application of the two year time limit for filing a suit for wrongful disclosure of return information. Section 6103,
here, titled Confidentiality and disclosure of returns and return information, generally requires that return information -- virtually everything the IRS knows about a taxpayer -- be confidential, with certain specified exceptions. Section 7431,
here, titled Civil damages for unauthorized inspection or disclosure of returns or return information, provides a taxpayer a civil remedy the IRS's disclosures of return information not authorized by Section 6103. Section 7431(d) provides that the suit must be brought "within 2 years after the date of discovery by the plaintiff of the unauthorized inspection or disclosure." The question addressed by the Ninth Circuit was when the limitations period begins.
The Court (with Judge Sidney R. Thomas,
here, as author of the majority opinion) starts its exegesis with a crisp statement of the issue and the holding:
This appeal presents the question, among others, of what event triggers the running of the statute of limitations for a claim for wrongful disclosure of a tax return pursuant to 26 U.S.C. § 7431(d). We conclude that the statute of limitations begins to run when the plaintiff knows or reasonably should know of the government's allegedly unauthorized disclosures. We also conclude, in the circumstances presented by this case, that the statute of limitations did not begin to run when the plaintiffs became aware of a pending general investigation that would involve disclosures, but only later when they knew or should have known of the specific disclosures at issue. Applying these principles to the facts of this case, we affirm in part and reverse in part.
