Opinion
No. CV-07-0927-PHX-FJM.
October 3, 2007
ORDER
The court has before it defendant's motion to dismiss (doc. 4), plaintiff's response (doc. 7), defendant's reply (doc. 9), and plaintiff's sur-reply (doc. 10), which we ignore because LRCiv 7.2 does not allow responses to replies.
On February 22, 2005, plaintiff provided Schedule C of her 2003 income tax return to defendant Zurich American Insurance Company ("Zurich") for the purpose of evaluating her third-party insurance claim. On May 4, 2005, a Zurich employee sent correspondence to Larry and Linda Parker and Don Sallee at the Sallee-Leavitt Insurance Agency, disclosing plaintiff's tax information. Plaintiff filed this action for damages against Zurich, pursuant to 26 U.S.C. § 7431, asserting that Zurich improperly disclosed her confidential tax information.
26 U.S.C. § 7431 allows civil damages for the unauthorized inspection or disclosure of "return or return information" in violation of 26 U.S.C. § 6103. Section 6103 defines "return" and "return information" as information filed with or furnished to the Internal Revenue Service ("IRS"). Id. at § 6103(b)(1)-(2). Defendant moves to dismiss the complaint, arguing that § 7431 applies only to tax information received by the IRS from the taxpayer, and not information voluntarily provided to and subsequently disclosed by private parties such as Zurich.
Section 6103 does not protect confidential tax information from every potential risk of disclosure, but instead focuses on those disclosures "arising from the filing of the taxpayer's return with the IRS." Stokwitz v. United States, 831 F.2d 893, 896 (9th Cir. 1987). The "overriding purpose [of section 6103] was to curtail loose disclosure practices by the IRS." Id. at 894. "[T]here is no indication in either the language of section 6103 or its legislative history that Congress intended to enact a general prohibition against public disclosure of tax information." Id. at 896. Instead, "section 6103 applies only to information filed with and disclosed by the IRS." Id. at 897.
This case does not involve a disclosure of confidential tax information arising from the filing of a taxpayer's return with the IRS. Instead, plaintiff's Schedule C was obtained by Zurich directly from the plaintiff, not from the IRS. Section 7431 was not intended to protect against such a disclosure. Therefore, we grant defendant's motion to dismiss plaintiff's claim based on 26 U.S.C. § 7431.
We also find unavailing plaintiff's post-complaint reliance on other statutes to support her claim. See Response at 2-3, 5. The Gramm-Leach-Bliley Act, 15 U.S.C. §§ 6801, et seq., does not provide for a private right of action. See 15 U.S.C. § 6805(a) ("This subchapter and the regulations prescribed thereunder shall be enforced by the Federal functional regulators, the State insurance authorities, and the Federal Trade Commission with respect to the financial institutions and other persons subject to their jurisdiction. . . ."); Rowland v. Prudential Fin., Inc., No. CV-04-2287, 2007 WL 1893630, at *6 (D. Ariz. July 2, 2007) ("The GLBA . . . does not provide for a private cause of action."). 26 U.S.C. § 7216 applies only to tax preparers, not to insurance companies such as Zurich, and 26 U.S.C. § 7213 is a criminal statute which does not provide for a private cause of action. Because plaintiff has failed to state a claim, we grant defendant's motion to dismiss.
IT IS ORDERED GRANTING defendant's motion to dismiss (doc. 4). The clerk is directed to enter final judgment.