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Case Against IRS Involving Phone Call Broadcast on Howard Stern Show Moves Forward

(Parker Tax Publishing April 2018)

A district court held that it was the proper venue for an action against the IRS for unauthorized disclosure of tax information in a case involving an IRS agent whose conversation with a taxpayer was inadvertently broadcast on the Howard Stern radio show. However, the court dismissed the taxpayer's negligence and invasion of privacy claims against the IRS because they were not authorized under the Federal Tort Claims Act, and found that the taxpayer failed to state a claim with respect to her intention infliction of emotional distress claim against the radio show. Barrigas v. U.S., 2018 PTC 63 (D. Mass. 2018).

Judith Barrigas called an IRS customer service center in May 2015 to discuss whether her tax refund for 2014 had been incorrectly applied to her 2011 and 2012 tax liabilities, which were already subject to a repayment agreement. Barrigas's call was routed to IRS agent Jimmy Forsythe who, without Barrigas's knowledge, was on hold on another phone line with the Sirius XM satellite radio program The Howard Stern Show. At some point during Forsythe's conversation with Barrigas, Forsythe was taken off hold. Apparently unaware that he was on the air, Forsythe continued to speak to Barrigas and, toward the end of their conversation, mentioned her phone number.

The show segment captured only Forsythe's side of the conversation; Barrigas's voice was not audible during the broadcast. The call between Barrigas and Forsythe lasted around 45 minutes but only about three minutes of the conversation aired. While Forsythe's side of the conversation was on air, Stern and his cohost commented on the complexity of the subject matter and expressed disinterest in Forsythe's work. They also commented that the person he was talking to did not "need to ask all those questions" and should "pay the bill," and that Forsythe should just give them "the bottom line" and "stop going through all the math."

Barrigas found out about Forsythe's call into the Howard Stern Show when she began receiving harassing text messages and telephone calls from unknown people in the days following the broadcast. She reported the incident to the IRS and to the show, but the IRS took action only after she reported it to a local news station. The show did not respond to her communications about the incident and a recording of the broadcast was allegedly available on the show's website for weeks after the incident. Barrigas claimed she suffered anxiety and difficulty sleeping and eating and sought treatment as a result of the incident. She also said that the broadcast had detrimentally affected her ability to find employment.

Barrigas sued the IRS and the Howard Stern Show in a district court. Her claims against the IRS included negligence and invasion of privacy under the Federal Tort Claims Act (FTCA) and disclosure of tax return information in violation of Code Sec. 7431. Barrigas brought tort claims against the Howard Stern Show including negligence, invasion of privacy, and intentional infliction of emotional distress. Barrigas argued that the broadcast of Forsythe's statements concerning her tax information and her phone number violated her right to privacy, that the show had a duty of reasonable care to avoid disseminating private information about her, and that the show's hosts either knew or should have known that emotional distress would result from their actions.

The IRS filed a motion to dismiss, arguing that Barrigas's tort claim against it was not permitted under the FTCA. The IRS also argued that the district court was not the proper venue for the Code Sec. 7431 claim. The Howard Stern Show filed a motion to dismiss arguing that Barrigas had failed to state a claim against it.

The district court held that it was the proper venue for Barrigas's Code Sec. 7431 claim because Barrigas claimed she lived in Massachusetts since filing her complaint and the government did not oppose her on that issue. However, the district also granted the IRS's motion to dismiss Barrigas's claim under the FTCA and dismissed all of her claims against the Howard Stern Show.

The district court determined that it did not have jurisdiction over Barrigas's tort claims against the IRS because the government had not waived its sovereign immunity under the FTCA. The FTCA provides a limited waiver of sovereign immunity to allow claims against the U.S. for damages caused by the negligent or wrongful acts of a federal government employee. However, under the tax exception, the waiver does not apply to any claim relating to the assessment or collection of taxes. As the court explained, the tax exception has been interpreted broadly, and courts have found that a wide range of IRS activity arises in respect of tax collections and assessments. The court agreed with Barrigas that Forsythe's call to the Howard Stern Show was beyond the scope of his duties but reasoned that the tax exception is meaningless if it does not cover activities that fall outside the scope of an IRS agent's employment.

The court also rejected Barrigas's tort claims against the Howard Stern show. The court found that there was no intentional dissemination of her private information because she was never named and her phone number was not disclosed until the final seconds of her and Forsythe's conversation. It was unclear to the court how Forsythe's on-air statements, which vaguely discussed the tax amounts and repayment terms of an unspecified third party, could be an intentional invasion of the third party's privacy. Even if the show's hosts acted intentionally, the court found that there was no serious intrusion into highly personal information because Barrigas's name, social security number, address or other identifying information were not disclosed and her voice could not be heard. The only disclosure was her phone number, which Barrigas admitted was publicly listed.

Barrigas's negligence claim against the show was rejected because the court characterized it as a claim for negligent invasion of privacy, which it found was not recognized under Massachusetts state law. Regarding Barrigas's emotional distress claim, the court found that Barrigas had not shown that the show's hosts had the requisite intent. The court reasoned that their on-air comments were mostly directed at Forsythe, not Barrigas, and those that did concern Barrigas were nondescript, general and not malicious. The court reasoned that it did not see how the broadcasting of limited tax-related information about an unidentified individual and the show's failure to remove a recording of the segment from its website for several weeks could be considered extreme or outrageous as required for an intentional infliction of emotional distress claim.

For a discussion of penalties relating to the unauthorized disclosure of tax return information, see Parker Tax ¶265,145.

Disclaimer: This publication does not, and is not intended to, provide legal, tax or accounting advice, and readers should consult their tax advisors concerning the application of tax laws to their particular situations. This analysis is not tax advice and is not intended or written to be used, and cannot be used, for purposes of avoiding tax penalties that may be imposed on any taxpayer. The information contained herein is general in nature and based on authorities that are subject to change. Parker Tax Publishing guarantees neither the accuracy nor completeness of any information and is not responsible for any errors or omissions, or for results obtained by others as a result of reliance upon such information. Parker Tax Publishing assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect information contained herein.

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