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CORRUPT: IRS Violates HIPAA, Snoops Through Medical Records

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The abuses at the Internal Revenue Service are much worse than we thought. An article run on Tuesday at Off the Grid News about IRS abuses in regard to conservative groups and their tax exempt statuses appears to be just the tip of the iceberg. A lawsuit filed in California indicates the agency stole the medical records of as many as 10 million people in an illegal raid. If that wasn’t bad enough, a press release about the same suit indicates a pattern of behavior that includes warrantless raids and the routine violation of federal laws at the IRS.

The lawsuit was prompted by a March 11, 2011, raid on an unnamed company in Southern California. The attorney who filed the suit, Robert E. Barnes of Malibu, alleges that IRS agents entered a private company and searched computers containing 60 million records that could hold information on up to 10 million people. The agents had no warrants or court order to take that data when they conducted the search.

IRS Violated Federal Law

To make matters worse, the agents violated doctor-patient privilege and a federal law called the Health Insurance Portability and Accountability Act (HIPAA) of 1996. HIPAA requires that patient data can only be released with a signed disclosure. It’s why you have to sign so many papers when you visit the doctor’s office.

The IRS agents clearly violated HIPAA on a massive scale when they searched the computers and retrieved that data. In his press release, Barnes said he believes that the records taken include information on drug treatment, psychological counseling, gynecological treatment, and other personal matters.

The IRS agents involved acted like storm troopers, according to Barnes. The agents had a search warrant with them, but the warrant did not cover the computers. When people in the IT department refused to cooperate, the agents threatened to rip out the computers and take them away.

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Barnes also claims that the agents in question used the computer system to watch the NCAA tournament on TV during the raid. He also alleges that agents were betting on the basketball games over the company’s computers and ordering takeout pizza during the raid.

This lawsuit reveals a far greater level of arrogance at the IRS and greater disdain for authority than we imagined. It also shows that the IRS feels it now has the right to seize all sorts of confidential information it isn’t supposed to see. What’s next, I wonder—the membership lists of political organizations or religious groups?

If the IRS feels it can violate doctor-patient privilege, what next—attorney-client privilege or the relationship between clergymen and parishioners? Would agents be able to enter a church and check the donation records to see how much money members are donating?

Something else that is frightening is that this is only the abuse that we’ve heard about. The pattern of behavior described in the warrant sounds like something that’s been going on for a while. The agents were used to behaving that way and not used to being questioned about it.

Taxpayers Could End Up Paying the Bill

What’s even more outrageous about this behavior is that taxpayers could end up shelling out a fortune because of the arrogant behavior of IRS operatives. Barnes has filed a class-action lawsuit against the agency on behalf of all 10 million people whose records were allegedly seized. He’s demanding a $25,000 payment for each of the victims.

If Barnes wins the lawsuit, that’s a $1.5 billion settlement, and guess who will pay it? It won’t be the IRS agents; they’ll simply retire and open up tax consulting businesses to make big bucks to augment their retirement packages. No, it will be the taxpayers whose rights the IRS violated in the first place.

Even bigger settlements could turn up if Barnes and other attorneys uncover more evidence of IRS abuse. His lawsuit seems to indicate that such massive data thefts are now routine business at the service.

Why Is This Happening?

Another interesting question that isn’t touched on is why is this happening? Unfortunately, Barnes’ lawsuit does not name the company that the data was stolen from, possibly to protect doctor-patient privilege. My guess is that it is a large health insurance organization such as Kaiser Permanente, Blue Cross Blue Shield, or United HealthCare.

Obviously the IRS has no business looking at health insurance records, yet is. What could your prescription records or surgical history possibly say about your income or taxes? Not much unless the agency is trying to enforce the Obamacare provision that slaps taxes on higher-end insurance policies for executives. If that’s the case, then the IRS only had the authority to search for financial records related to those specific policies and the people they were issued to.

The most likely rationale for the IRS’s action is that the agents believed that those records would point them to tax evasion. Unfortunately, those records are now in the hands of an agency that has no respect for HIPAA and no intention to enforce that law.

Barnes is seeking an injunction to stop the IRS from possibly sharing that data with other federal law enforcement or intelligence agencies. The fact that he’s seeking such an injunction is frightening; that indicates Barnes believes the IRS has shared that data or is planning to share it.

That raises another troubling possibility—the IRS could be serving as a front for another federal agency, such as the DEA or the FBI. This might have been a fishing expedition looking for data that the agents could share with other agencies.

No matter how you cut it, this lawsuit and the recent revelations about the IRS’s targeting of the Tea Party proves that the agency has no respect for the constitutional or other rights of Americans. Congress and the president need to take strong action to bring this rogue agency under control now.

Media Ignores the Case

It is frightening to note that the media is ignoring the case, even though the allegations here are far more bothersome than those in the Tea Party case. The number of people involved is greater, and those targeted are average Americans of all backgrounds and beliefs.

The press and television should be all over this story, but they’re not. What’s worse is that the attorney behind the suit, Robert E. Barnes, is not some crank or activist. He’s a big-time Hollywood tax attorney whose clients include Wesley Snipes and other movie stars.

Barnes also knows the IRS quite well; one of his clients is Joe Bannister, a former IRS agent, who was falsely accused of fraud by the U.S. Justice Department when he tried to blow the whistle on IRS corruption. Barnes understands the IRS well and has a good knowledge of its operations. He wouldn’t be filing this kind of lawsuit unless he thought there was enough evidence out there to win it.

The Tip of the Iceberg

Even though the mainstream media has been ignoring this case so far, there’s no way it can keep it secret forever. Expect to hear a lot more about this in the near future; in his press release, Barnes has promised to release more information. That means he has evidence that can prove his case. It also indicates that there’s more evidence of IRS abuse out there, and he intends to expose it.

The Tea Party scandal at the IRS is only the tip of the iceberg. The entire agency is corrupt, and that corruption is about to be exposed in a big way. Hopefully that exposure will convince Americans to reform the tax system and adopt a new system, such as a national sales tax, that will exist to raise revenue for the federal government not to empower arrogant bureaucrats.


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