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May 7, 1984


The opinion of the court was delivered by: William T. Hart, District Judge.


Plaintiffs, Thomas E. Rueckert and Barbara Rueckert, bring this action against two Internal Revenue Service ("IRS") agents and three Illinois Department of Revenue ("IDOR") agents,*fn1 seeking damages for unauthorized disclosure of information contained on their federal tax returns. Subject matter jurisdiction exists pursuant to 28 U.S.C. § 1331(a). Venue is proper in this district, where the plaintiffs' claim arose. 28 U.S.C. § 1391(b). Currently before the Court are the cross-motions of all parties for summary judgment.


Thomas Rueckert is employed by the IDOR as a revenue fraud agent. During the relevant time periods, the IDOR had a policy forbidding revenue fraud agents from accepting outside employment without prior authorization. After another IDOR revenue agent informed Dunn that Rueckert was receiving outside income from his practice as an attorney, Dunn initiated an investigation of Rueckert's possible outside employment activities. Dunn inspected Rueckert's personnel file, discovering that the IDOR had not authorized Rueckert to engage in outside employment, then reviewed Rueckert's Illinois income tax returns. His review disclosed that Rueckert's adjusted gross income for the years 1978, 1979, and 1980 was in excess of the salary paid him by the IDOR. To determine the composition of Rueckert's income for those years, Dunn requisitioned copies of Rueckert's federal income tax returns. Either Gore or Spencer approved Dunn's request at the IRS Center in Kansas City, Missouri.

As part of the investigation, Dunn assigned IDOR agent Groeper to interview Rueckert. Groeper interviewed Rueckert and prepared a memorandum containing the substance of that interview. After receiving the federal tax returns. Dunn incorporated information from the returns into the memorandum*fn2 originally prepared by Groeper. This memorandum was published to Johnson and others at the IDOR.


Plaintiffs initiated this action pursuant to section 7217*fn3 of the Internal Revenue Code ("IRC"), which provides for a private cause of action as follows:

    (a) Whenever any person knowingly, or by reason of
  negligence, discloses a return or return information
  (as defined in section 6103(b)) with respect to a
  taxpayer in violation of the provisions of section
  6103, such taxpayer may bring a civil action for
  damages against such person, and the district courts
  of the United States shall have jurisdiction of any
  action commenced under the provisions of this

26 U.S.C. § 7217. However, damages are not recoverable where the disclosure resulted from "a good faith, but erroneous, interpretation of 6103." 26 U.S.C. § 7217(b).

Subsection 6103(a) sets forth a general rule that "returns" and "return information"*fn4 are confidential, and may not be disclosed by officers or employees of the United States, or other individuals with access to such information, "except as authorized by this Title." 26 U.S.C. § 6103(a). Subsections 6103(c)-(g) set out exceptions to the general rule of nondisclosure, including the "tax administration" exception at issue in this action. Subsection 6103(d) states that return and return information:

  shall be open to inspection by or disclosure to any
  State agency, body or commission . . . which is
  charged under the laws of such state with
  responsibility for the administration of state tax
  laws for the purpose of, and only to the extent
  necessary in, the administration of such laws . . .
  (emphasis added).

State Defendants

A. Defendant Groeper

Groeper is named as a defendant in this action because his name appears on the memorandum which contained excerpts of the Rueckerts' tax returns and on the federal form requesting copies of their returns. Groeper does not deny that his name appears on the request or the memorandum. In deposition testimony, Groeper and Dunn both indicated that Groeper prepared a preliminary memorandum for Dunn which consisted solely of the contents of an interview Groeper had with Rueckert. Dunn later incorporated the return information into a final draft and signed Groeper's name. Groeper further states that he neither saw the returns nor the final draft of the memorandum. Plaintiffs have not attempted to directly ...

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