Class-Action Lawsuit Aimed Against the Internal Revenue Service

A lawsuit emerging from California alleges that the IRS  improperly accessed about 60 million health records belonging to about 10 million U.S. residents,according to  Healthcare IT News reports (McCann, Healthcare IT News, 3/15).

See its report as follows:

Details of the Allegations

An unnamed HIPAA-covered entity in California — referred to as John Doe Company — is filing the lawsuit, which claims that 15 IRS agents inappropriately seized medical records on March 11, 2011 (Kearn, Courthouse News Service, 3/14).

The firm acknowledged that the IRS agents had a search warrant for the financial data of a former John Doe Company employee. However, the company claimed that the agents’ warrant “did not authorize any seizure of any health care or medical record of any persons, least of all third parties completely unrelated to the matter”

The complaint also stated, “IT personnel at the scene, a [HIPAA] facility warning on the building and the IT portion of the searched premises, and the company executives each warned the IRS agents of these privileged records.”

The IRS agents ignored the warnings, according to the complaint.

According to the complaint, the records that the IRS agents accessed without authorization include data on:

  • Gynecological counseling;
  • Psychological counseling; and
  • Sexual and drug treatment, among other medical treatment data.

Damages, Action Sought

The lawsuit is seeking punitive damages for constitutional violations, as well as $25,000 “per violation per individual” in compensatory damages. Those damages could start at a minimum total of $250 billion.

The lawsuit also seeks:

  • A declaratory judgment to protect the proprietary and privileged data in records;
  • An injunction preventing the IRS from sharing the data; and
  • An order requiring the return of the seized records and “the purging of government databases of all such records” (Courthouse News Service, 3/14).


One wonders whether this is the first foray of many into the government “peeking” into our records and what the real reason is behind wanting the medical community to convert to digital records over paper ones.

Is this the beginning of deciding upon which medical treatment options will be offered in the future (based on economics)?

Is this a way that the IRS can see how to further look into our financial resources as a tax revenue?

If the IRS can peek into our records, who else can delve into our history?  Will it be easy for hackers?  Is this the edge of disaster?

What is your opinion?