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Medical Firm Sues IRS For 4th Amendment Violation In Records Seizure 365

Posted by timothy
from the tell-me-again-why-you-hate-all-that-is-good dept.
cold fjord writes "A healthcare provider has sued the Internal Revenue Service and 15 of its agents, charging they wrongfully seized 60 million medical records from 10 million Americans ... [The unnamed company alleges] the agency violated the Fourth Amendment in 2011, when agents executed a search warrant for financial data on one employee – and that led to the seizure of information on 10 million, including state judges. The search warrant did not specify that the IRS could take medical information, UPI said. And information technology officials warned the IRS about the potential to violate medical privacy laws before agents executed the warrant, the complaint said." Also at Nextgov.com.
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Medical Firm Sues IRS For 4th Amendment Violation In Records Seizure

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  • I was expecting the CDC to pull this stunt, but the IRS?
    • I was expecting the CDC to pull this stunt, but the IRS?

      They're just getting a head start on Obamacare - which they will be administering.

      Ten million people's medical records? They now have a mandate to have EVERYBODY's.

      • by Microlith (54737) on Sunday May 19, 2013 @08:52PM (#43770455)

        They now have a mandate to have EVERYBODY's.

        Really now? Where in the legislation does it say that the IRS has the right to access health records?

        • by camg188 (932324) on Sunday May 19, 2013 @11:03PM (#43771031)

          Really now?...

          Where in the legislation does it say they could seize the 60 million records they are accused of taking, "despite knowing that these medical records were not within the scope of the warrant?"
          Where in the legislation does it say they can target specific political affiliations to deny/delay tax exempt status or use special scrutiny as a bullying tactic?

          If these aren't bright enough red flags for you:
          The Patient Protection and Affordable Care Act [gpo.gov]

          Sec. 1502-IN GENERAL.-Part III of subchapter A of chapter 61 of the Internal Revenue Code of 1986 is amended by inserting after subpart c the following new subpart:
          SEC. 6055. REPORTING OF HEALTH INSURANCE COVERAGE
          (b) FORM AND MANNER OF RETURN
          (1)
          (B)
          (iv) such other information as the Secretary may require

          Where 'Secretary' refers to the Secretary of the Treasury. This section describes what is to be reported to the IRS. Sections (i) through (iii) specify name, address, tax id number and policy information. Section (iv) is completely open ended.

      • Re: (Score:2, Insightful)

        by Mashiki (184564)

        They're just getting a head start on Obamacare - which they will be administering.

        Would that be like the IRS targeting conservative, jewish and non-supporting AGW groups. I'm sure it was all fine, nothing like, to ensure that the "right message" is being presented by stifling dissenting views. Or seizing AP phone records, or going after commentators that are critical of Obama and Obamacare?

        • by Anonymous Coward on Sunday May 19, 2013 @09:21PM (#43770597)

          After all those years of the current anti-Obama crowd desperately defending the shamefully illegal shenanigans of GWB's administration, I just don't quite know how to react to seeing them implode over this Obama-related stuff.

          Why couldn't you get this angry at Bush Corp when it was doing similar or worse stuff? Why did you try so hard to dismiss any criticism of the unlawful (and almost always far worse) behavior of people such as GWB, Cheney, Rumsfeld, Rove, et al?

          I'm not suggesting it is wrong for you to be critical of current events, because we should all be crying foul. But it would be nice if you objected when everyone does it, and not just when it's the other team.

          • Re: (Score:2, Informative)

            by Anonymous Coward

            Why couldn't you get this angry at Bush Corp when it was doing similar or worse stuff

            Can you point the rest of the world to where Bush n' Co, were doing the same deal as Nixon. That's right you can't. Though Obama and Co were, and are. While attempting to claim that "it's someone below me, I know nothing." Perhaps it was Sgt. Shultz that is really in charge of the whitehouse...one can't be too sure.

            • Bush the same as Nixon? Don't even try to make that comparison.

              Nixon was a crook, yes. But he was also a smart, effective, and sometimes courageous politician. He was not afraid to spend a lot of the political capital he'd accumulated during his Red-baiting days by going to China and meeting Mao.

              That took balls, something which neither of the Bushies ever had in the first place.

          • by Ungrounded Lightning (62228) on Sunday May 19, 2013 @09:38PM (#43770691) Journal

            Why couldn't you get this angry at Bush Corp when it was doing similar or worse stuff?

            Lots of us were down on Bush, too.

            You just probably thought we were lefties. B-)

        • If only someone in Congress had tried to submit a law shielding the media from that sort of information seizure. Oh, right. Never mind, the Free Flow of Information Act was of course filibustered by Republicans in the Senate in 2008 with strong opposition by George Bush and died a nasty death. Because of course the Republicans wanted the executive branch to have this very ability.
      • by cold fjord (826450) on Sunday May 19, 2013 @09:17PM (#43770577)

        The IRS is the one that is charged with ensuring that everyone has insurance, not with keeping and maintaining medical records.

        Lets use the ever popular car analogy. The Department of Motor Vehicles checks to make sure that you have car insurance. The Department of Motor Vehicles doesn't keep copies of the maintenance records, oil changes, refueling, car washes, and tune-ups. The IRS is like the DMV - they will check to make sure that you have insurance, they shouldn't have your health records. This is over the line.

        I would hope your wouldn't actually want that. The most charitable thing you can say at the moment is that they apparently have more power than they can manage is a responsible way, let along legal way.

        • by techno-vampire (666512) on Sunday May 19, 2013 @10:04PM (#43770793) Homepage
          The most charitable thing you can say at the moment is that they apparently have more power than they can manage is a responsible way, let along legal way.

          It may be more accurate to say that certain IRS agents think they have far more power than they actually do and have let their mistake go to their heads.
        • by hedwards (940851) on Sunday May 19, 2013 @10:42PM (#43770953)

          This isn't necessarily over the line.

          The article doesn't state it, but it looks like they probably imaged the entire HDD, which is normal, and that resulted in them having copies of all those medical records. And because the records themselves were not properly stored the IRS now has access to them.

          Sounds to me more like the firm is concerned with covering their own asses for not having properly secured the data in the first place. Laptops have a tendency to be stolen or otherwise walk off, and if they lost the records that easily, I'd want to change insurers.

          • by cold fjord (826450) on Sunday May 19, 2013 @11:18PM (#43771085)

            This wasn't a laptop, this was servers. Probably a pretty substantial setup too. I wouldn't be surprised if it was a cluster of big RISC boxes with a substantial SAN. Where you are thinking, "HDD," think disk storage array, a big one.

            Sounds to me more like the firm is concerned with covering their own asses for not having properly secured the data in the first place.

            It is clearly indicated the agents went outside what was in the warrant, were warned about it, and took the data anyway - just to get some financial data on one former employee. I would normally expect you to be outraged about this sort of thing, violated warrant, government overreach and all.

    • by cold fjord (826450) on Sunday May 19, 2013 @08:36PM (#43770387)

      Oh, it's more than that. The IRS is the key enforcer for the Affordable Care Act, also known as Obamacare.

      Your Next IRS Political Audit - The tax agency is getting vast new power in health care [wsj.com]
      The IRS Is Accessing Your Health Records. You Trust Them? [forbes.com]

      The US Government needs to get the problems at that agency fixed, now. Between this and the suppression of political groups going on [thedailybeast.com], this is intollerable and undemocratic. What did Franklin say? A Republic, if you can keep it?

      The IRS’s Curious Immunity - It’s worse than the PATRIOT Act. [nationalreview.com]

      • by Attila Dimedici (1036002) on Sunday May 19, 2013 @08:50PM (#43770443)

        The US Government needs to get the problems at that agency fixed, now.

        What problem? The issues you are referring to are features of the IRS that led to it being chosen for its role as the key enforcer of the Affordable Care Act, not bugs that would lead those who passed that law to consider it unwise to give it that additional power.

      • by I'm New Around Here (1154723) on Sunday May 19, 2013 @08:53PM (#43770461)

        Sadly, the guys who idolize President Obama don't care about this story, or the many others. To them, it's just the conservatives/GOP showing their hatred of the first black president, nothing more.

        So, I've given up hope that they will see the light of what this administration is like. They'll keep voting for guys like him, who will bring this country down very soon. There is no avoiding that fate. I'm not clamoring for revolution, but I think a civil war is coming.

        • by amiga3D (567632) on Sunday May 19, 2013 @09:15PM (#43770565)

          It's not about Republican versus Democrat. Everywhere it counts they are the same. When it comes to fucking over the country they are bipartisan. They differ only on peripheral issues that, while important to the public, are irrelevant to the things which really matter to those who rule. Things like abortion, religion, racism, affirmative action, and gay marriage are just hot button issues used to divide the public so that the elite can rule us better. As long as we're hating each other over things that don't matter to our rulers then it's all good. You can give up though, it's hopeless. Every single time I pointed out how bad GW Bush was all any of his supporters had to say was "he's not as bad as those evil Democrats" and when I point out the fallacies of the Obama administration all I get is "at least he's better than those evil neo-cons!" People have their side and they are oblivious to anything other than how bad the other side is.

  • by girlinatrainingbra (2738457) on Sunday May 19, 2013 @08:15PM (#43770281)
    Scientology has been the only group that has fought the IRS and won, albeit with dirty tricks and pressure:
    http://en.wikipedia.org/wiki/Scientology#Dispute_of_religion_status [wikipedia.org] : the IRS claimed that it was all above-board and had nothing to do with the tactics and push-through of Scientology
    http://en.wikipedia.org/wiki/Operation_Snow_White [wikipedia.org] : the theft of private and privileged documents from the IRS offices and from other governmental agencies
    even Wikipedia thinks that CoS plays dirty [wikipedia.org] and doesn't play fair

    If it takes that level of psychopathy and money and criminal activity in order to successfully fight against the IRS, what odds does a company with legitimate meritorious claims against the IRS have? None? :>(

    • by Jah-Wren Ryel (80510) on Sunday May 19, 2013 @09:13PM (#43770557)

      Scientology has been the only group that has fought the IRS and won

      Huh? The IRS loses all the time. Even if you just narrow the list down to religious groups pushing the boundaries of what qualifies for the religious tax-exempt status, the IRS lost to a church that was endorsing political candidates. [philanthropy.com]

      • Thanks for that link. I had not read that. Of course I understand that out of many audits of personal situations, there must be more than zero individuals who have won against the IRS, so I did not mean that individuals have not won against the IRS. But I was under the mistaken impression that the IRS always won again large groups and institutions. I can't find the link from the Union-Tribune (San Diego) that I read. I think it was about two years ago. But considering that your link is from 2009, that
  • Propaganda (Score:2, Interesting)

    by Anonymous Coward

    "when agents executed a search warrant for financial data on one employee –"

    A search warrant requires judicial approval. This looks like a company that is taking advantage of the current IRS "scandal" to defend itself against a wholly unrelated investigation. It worked.

    • Re:Propaganda (Score:5, Informative)

      by cold fjord (826450) on Sunday May 19, 2013 @08:51PM (#43770447)

      They had a search warrant for financial data regarding one former employee, and they took tens of millions of medical records too, which they weren't entitled to.

      Warrant said they could take A, they took A and B.....ZZZZZZZZ. Everything from B on was unrelated information to the investigation proper, and not covered by the warrant. They stepped over the line, despite being warned. How is this confusing to you?

      • by amiga3D (567632)

        He can't understand why you don't trust the government. After all, they just want to help keep us all safe. That nasty old Constitution just keeps getting in the way of them doing their job.

      • Re: (Score:3, Insightful)

        by vux984 (928602)

        They had a search warrant for financial data regarding one former employee, and they took tens of millions of medical records too, which they weren't entitled to.

        So they took a hard drive that contained that employees information along with some other database and didn't remove and leave behind the ceramic platter that contained the other database?

        . They stepped over the line, despite being warned. How is this confusing to you?

        The question is really what did they actually take? Did they haul out all the fil

      • by berzerke (319205)

        ...they took tens of millions of medical records too, which they weren't entitled to...

        Actually, from RTFA, it appears they were entitled to them. From the article:

        ...defendants [IRS thugs] threatened to ‘rip’ the servers containing the medical data out of the building if IT personnel would not voluntarily hand them over,” the complaint states...

        By giving them the servers, the IT personnel effectively waived the fourth amendment protection. As painful as it might have been to watch, the IT personnel should have said "NO! I do not consent to you taking the servers." rather than hand them over. If the IRS thugs then did rip them out, now you have a fourth amendment violation.

        It's the sa

        • If you think saying, "I don't consent to this search," makes the search illegal, I've got some prime ocean-front property back in Phoenix that you might be interested in...

  • by Impy the Impiuos Imp (442658) on Sunday May 19, 2013 @08:25PM (#43770327) Journal

    They seized 60 million records of 10 million people because of 1 possible tax cheat? Nice.

    To paraphrase a wise man recently, "I don't want to see who's getting slapped on the wrist. I want to see who's going to jail."

    • They seized 60 million records of 10 million people because of 1 possible tax cheat?

      Maybe they confiscated the disk drive.

      • Substitute storage array and you might be right. From what I've read, it almost certainly wasn't a trivial amount of data as it included treatment plans, history, etc.. Since it was for a former employee, you have to wonder why they couldn't either just ask for a report to be printed, or something else. It is very hard to believe that this isn't a massive over-reach.

        • by Black Parrot (19622) on Sunday May 19, 2013 @09:24PM (#43770611)

          Substitute storage array and you might be right. From what I've read, it almost certainly wasn't a trivial amount of data as it included treatment plans, history, etc.. Since it was for a former employee, you have to wonder why they couldn't either just ask for a report to be printed, or something else. It is very hard to believe that this isn't a massive over-reach.

          I don't know about that. Right now all we have is the plaintiff's word for it that proper protocols weren't followed. They admit there was a warrant.

          Let's get some facts before we jump to conclusions. If we have a story everytime someone cries foul, there won't be enough bandwidth for anything else.

          Now if someone gets convicted, or slapped with a zillion dollar fine, then we'll have a story.

          • by Hatta (162192)

            Now if someone gets convicted, or slapped with a zillion dollar fine, then we'll have a story.

            And if the government is too corrupt to jail its own, that's not a story?

      • by Dunbal (464142) *
        They usually take the whole server and not one fuck is given. 'cos they're the gubmint.
        • by amiga3D (567632)

          They're lucky they didn't take the entire data center and auction it off after they were done with it. Keep fucking with them and see what happens next.

  • Scandalous! (Score:5, Insightful)

    by Black Parrot (19622) on Sunday May 19, 2013 @08:29PM (#43770345)

    Let us know when you have the other side of the story.

    • Re:Scandalous! (Score:4, Insightful)

      by sabri (584428) on Sunday May 19, 2013 @11:07PM (#43771039)

      Let us know when you have the other side of the story.

      I can tell you the other side of the story right now:

      Investigative Media: IRS, could you please give is your side if the story?
      IRS: No, we do not comment on pending legislation

      --- Jury gives verdict ---

      Investigative Media: IRS, could you please give is your side if the story?
      IRS: No, we do not comment while we appeal

      --- Supreme Court gives verdict ---

      Investigative Media: IRS, could you please give is your side if the story?
      IRS: No, we do not comment on matters that have been dealt with by the courts, we look at the future now.

  • It appears that the IRS had a legitimate search warrant. if the data had been appropriately encrypted, it would be impossible tor the IRS to get access to it without help. If they were shown to have got that help, then they would have been clearly in violation. As it is, the company is at least as much to blame, surely?
    • Re: (Score:3, Interesting)

      by Anonymous Coward

      The data was handed over after the IRS threatened to rip the servers out. A move like that can seriously impact a business. The did what they felt they had to do and decided to let the courts sort it out.

    • by Charliemopps (1157495) on Sunday May 19, 2013 @09:09PM (#43770535)

      You clearly have no idea how such systems work. My guess is that the IRS served their warrant and then demanded read only ODBC/API access to the companies systems. The company's DBAs likely balked at the idea... I know I would... and said "listen, if you have that sort of access, you could violate Hipaa if you submit the wrong query. We're very stringent on what we allow to be run against our tables" But the IRS being the IRS said "Fuck you, we're the IRS" and went right ahead. Once you have a legit login and password the data is no longer encrypted for you.

      Knowing the ramifications of what the IRS were doing, the company likely logged their queries. The IRS's DBAs likely were worried the company in question could potentially get a court injunction to stop their access so their first query was likely "Select * from customers;" and dumped the entire table to a local table. Then company in question likely saw this, freaked out, but realized any lawsuit they filed would likely be quashed by "We have an ongoing investigation" yada yada... so they kept quiet about it until the original case was over.

      I'm just guessing but I've been in similar situations and the governments admins are pricks and usually don't have a clue what they are doing. Violating hipaa is VERY easy to do if you don't know what you're doing. So much so that many people don't even want to work in departments that have access to such information. Make a typo in your query and you're getting walked out the door.

      • Thanks for an enlightening reply. I guess I was assuming the data would be nicely segmented, but I guess these days it's all run together. Raises some interesting questions for lawyers and DBAs to get their teeth into.
  • by Anonymous Coward on Sunday May 19, 2013 @08:42PM (#43770411)

    When everyone kept their mouths shut when the Warrantless Wiretapping was approved, did you expect it to stop there? Benjamin Franklin's quote about temporary safety fell upon deaf ears in the U.S. We are now the police state plutocracy we've always wanted. Good luck getting your privacy back.

  • End the IRS (Score:4, Insightful)

    by Alex Vulpes (2836855) on Sunday May 19, 2013 @08:50PM (#43770441)
    We should abolish the IRS entirely. Just kill the dang thing.

    (Sorry if that sounds like a shameless political plug, but I'm starting to think that's what really needs to happen.)

    • by Osgeld (1900440)

      I agree, name another government entity that the vast majority of citizens are frightened of because you are forced to deal with them anywhere from quarterly to yearly, and if you make a single mistake they will come in and chew your ass up and spit you out with everything you own stripped from your hands.

      • Re:End the IRS (Score:5, Interesting)

        by squiggleslash (241428) on Sunday May 19, 2013 @10:16PM (#43770845) Homepage Journal

        I'm not scared of the IRS and I'm pretty sure, FWIW, that if I did make a single mistake on a tax return they would (a) be unlikely to notice, and (b) if they did notice they'd refund me the difference (or if the error means I owe more taxes, require I pay the difference, with interest. Either way, I end up paying what I should have done to begin with.)

        I seriously doubt that the number of people terrified of the IRS is particularly large. I know there are a lot of irresponsible tax evaders who want all the benefits of civilization with none of the duties it entails who hate the IRS, but that's rather different.

        • Re: (Score:3, Interesting)

          by Common Joe (2807741)

          I don't know whether to agree with you or disagree with you so I'll just tell a story that happened to me instead.

          I'm American, but my wife is not a U.S. citizen. We'd been living in the U.S. for years -- her with a green card paying her taxes every year on a business she ran in America. Uncle Sam loved us and we never had any problems. Circumstances changed and last year we decided to move to Germany -- her home country. In preparation, we called up the IRS and asked them what we needed to do. We went

  • lotta money (Score:4, Interesting)

    by Charliemopps (1157495) on Sunday May 19, 2013 @09:12PM (#43770553)

    The suit seeks $25,000 in compensatory damages, per violation.

    * 10 million violations is 250 billion dollars? Holy fuck.

    The only company that I can think of that has that large of a database of health records would be either one of the government agencies... or Epic. Time to buy some stock.

  • by guttentag (313541) on Sunday May 19, 2013 @11:17PM (#43771077) Journal
    Disclaimer: I am a former Washington Post journalist

    First of all, TFA is at The Washington Times. That alone makes its credibility dubious. The Washington Times was founded by Sun Myung Moon [wikipedia.org] (crazy "Unification Church" cult leader) who stated that the purpose of the "newspaper" was to be "the instrument in spreading the truth about God to the world." Moon was convicted that same year of filing false federal income tax returns and conspiracy and served 13 months in prison. The Times has long been known as a conservative shill (although it has a decent sports section) that had to be financially supported by Moon's "church" to survive. Moon spent nearly $2 billion of his followers' money over 20 years to keep the paper afloat.

    Second, The Washington Times article doesn't even claim to have done any reporting on its own... it cites some article from UPI that isn't readily available on UPI's home page or even by searching UPI for "IRS." Ultimately found the "article" here [upi.com]. It's a 9-paragraph blog posting. UPI was once a respectable news agency like AP or Reuters, but its relevance diminished to the point where it was bought out in 2000 [wikipedia.org] by... you guessed it: Sun Myung Moon. UPI's White House correspondent retired the next day after 57 years with the organization. These days UPI doesn't even have a White House correspondent, and its finances have gotten so bad that it relies on free articles contributed by college students.

    The UPI blog posting cites a Courthouse News Service article [courthousenews.com]: John Doe Company sued 15 John Doe IRS agents in Superior Court. The plaintiff's attorney alleges that the records affected may include those of "politically controversial members of the Screen Actors Guild and the Directors Guild, and prominent citizens in the world of entertainment, business and government, from all walks of life." He goes on to complain that the unnamed IRS agents "decided to use John Doe Company's media system to watch basketball, ordering pizza and Coca-Cola, to take in part of the NCAA tournament," but "Plaintiff's attorney Robert E. Barnes declined to elaborate on the complaint's allegations, saying he will have more information 'in a few months.'"

    Why publish a story no one can verify, since all you can say for now is that that unnamed people at the IRS are illegally snooping on unnamed politically controversial people through an unnamed medical firm? Because it helps fuel the fire driving the current Republican party line of "the IRS is evil and Obama is responsible." Because some ignorant blogger might pick it up and run with it, thinking that The Washington Times and UPI are real news organizations, and not even bother to look for the source of this story. Great job Timothy.
    • As a fellow ex-journo, I salute you.

      Nice work there. Thanks for digging this out.

  • by L. J. Beauregard (111334) on Monday May 20, 2013 @09:12AM (#43772765)

    It's wonderful that you're finally concerned about the Fourth Amendment!

    NOW WHERE WAS ALL THIS WORRY WHEN THE PATRIOT ACT WAS BEFORE CONGRESS?

  • by Vrtigo1 (1303147) on Monday May 20, 2013 @09:32AM (#43772863)
    Doesn't the federal government enjoy the privilege of being one of the few entities that cannot be sued unless they allow you to sue them?

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