Aloe Vera of America, Inc. v. United States, 699 F.3d 1153

Taxpayers contend the two-year § 7431(d) discovery period runs from each allegedly unauthorized disclosure, not from a single event.
The relevant statute, 26 U.S.C. § 7431(d), requires filing within two years after discovery of the unauthorized disclosure.
“Return information” is broadly defined and protected against disclosure to foreign governments under § 6103(k)(4) when not pertinent to treaty purposes.
The case concerns an alleged disclosure to Japan’s NTA during a joint IRS–NTA examination and whether such disclosures were authorized.
A prior Ninth Circuit decision held § 7431(d) is jurisdictional and that discovery begins when the plaintiff discovers the disclosure, not when it becomes aware it was unauthorized.
A FOIA process later revealed the specific disclosures in August 1998, which is central to timing for Count I and Count II claims.

Issue	Plaintiff's Argument	Defendant's Argument	Held
When does § 7431(d) begin running?	Aloe Vera asserts discovery triggers on a per-disclosure basis.	The government would have the limitations period begin at a single date.	Date of discovery is when the plaintiff knows or should know of each disclosure.
Does inquiry notice apply to § 7431(d) timing?	Aloe Vera argues inquiry notice governs per-disclosure timing.	The government argues a single audit notice suffices.	Inquiry notice applies per disclosure; not all disclosures on the same date.
Did the district court have jurisdiction over Count I and Count II?	Count I disclosures fall within § 7431(d); Count II involves treaty-pertinent disclosures.	Count II jurisdiction is lacking due to discovery timing; Count I has disputed facts.	Court had jurisdiction over Count I but not over Count II.
Was there a genuine dispute about knowingly false disclosures?	Disclosures of allegedly false information could be protected only if not knowing falsehood.	Some disclosures could be protected as pertinent if factual; others require knowing falsehood.	There are genuine issues of material fact on whether the government knowingly disclosed false information.
Does § 7431(b) good-faith defense apply?	Even erroneous interpretations cannot shield knowing false disclosures.	If error was in good faith, liability may be barred.	Good-faith defense does not absolve liability where knowing falsehood defeats statute's purpose.

Aloe Vera of Am., Inc. v. United States, 580 F.3d 867 (9th Cir. 2009) (reaffirmed discovery rule and jurisdictional nature of § 7431(d))
Mallas v. United States, 993 F.2d 1111 (4th Cir. 1993) (return information constitutes 'return information' under § 6103)
Mangum v. Action Collection Serv., Inc., 575 F.3d 935 (9th Cir. 2009) (limitations begin when plaintiff knows or has reason to know of injury)
Norman-Bloodsaw v. Lawrence Berkeley Lab., 135 F.3d 1260 (9th Cir. 1998) (discovery rule application in various statutory contexts)
United Sav. Ass’n of Tex. v. Timbers of Inwood Forest Assocs., 484 U.S. 365 (1988) (context for interpreting damages and disclosure acts)
Rueckert v. IRS, 775 F.2d 210 (7th Cir. 1985) (purpose of § 6103 to protect taxpayers from malevolent disclosure)
McDonald v. United States, 102 F.3d 1009 (9th Cir. 1996) (good-faith defense—requires clearly established rights)
Siewick v. Jamieson Sci. & Eng’g, Inc., 214 F.3d 1372 (D.C. Cir. 2000) (even an estimated figure can be false if knowingly inaccurate)