Section 7431 provides redress for taxpayers in which such confidential taxpayer information is improperly disclosed. Although the IRS disclosure of confidential taxpayer names appears to meet the general rule giving rise to a cause of action, it is unlikely that the named taxpayers would recover damages because the United States is likely to meet the exception where the disclosing party has a good faith, but erroneous, interpretation of section 6103. The United States would meet this exception by showing that a reasonable IRS agent would have believed that the agent could disclose the information. For purposes of this Article, it is assumed that the IRS would be able to meet this threshold by showing that KPMG was the taxpayer in the summons enforcement action and that its internal policies dictated that it may disclose third party names when filing a petition to enforce KPMG's summonses. Assuming Tax Analysts is successful in its FOIA requests of the government, the decision making process of the government on this matter will illuminate whether this assumption is borne out by the facts.
Beckett G. Cantley, United States v. KPMG: Does Section 6103 Allow the IRS to Put Taxpayer Names on the Front Page of the Wall Street Journal, 50 Clev. St. L. Rev. 1 (2002-2003)