The district court granted the government's motion for summary judgment on the ground that sections 6103 and 7431 applied only to disclosure of information received by the Internal Revenue Service (IRS) from the taxpayer, and not to disclosure of information obtained directly from the taxpayer by others.

The district court noted that section 7431 applied to disclosure of "return or return information" in violation of section 6103, and that the quoted terms had the same meaning in both statutes. One element of the definition of "return" was that it be "filed with the Secretary." 26 U.S.C. Sec. 6103(b)(1). Similarly, an element of the definition of "return information" was that it be "received by, recorded by, prepared by, furnished to, or collected by the Secretary." 26 U.S.C. Sec. 6103(b)(2).

The court found the information disclosed in this case was "obtained directly from the plaintiff in the course of a search of his work space at NOSC," and therefore was not "filed with" or "received etc." by the Secretary and subsequently disclosed either directly or indirectly by IRS employees to the Navy employees.

The court noted section 6103 was not enacted to prevent government employees from obtaining information from the taxpayer directly through such means as civil discovery or a search warrant; and stated it "was convinced that return and return information in the taxpayer's hands are subject to no greater protection than other private papers in taxpayer's possession." If the information was wrongfully obtained from the taxpayer by Navy employees, the court said, the appropriate remedy was the pending suit initiated by Stokwitz against these employees under Bivens v. Six Unknown Named Agents of Federal Bureau of Narcotics, 403 U.S. 388, 91 S. Ct. 1999, 29 L. Ed. 2d 619 (1971).

The district court concluded that section 6103, and hence section 7431, were directed "at those government officers and employees who obtained returns and return information as a result of these materials being filed by or on behalf of the taxpayer, or received by, furnished to, or collected by the Secretary."

We agree.

The statute must be read as a whole. See United States v. Morton, 467 U.S. 822, 828, 104 S. Ct. 2769, 2773, 81 L. Ed. 2d 680 (1984); Moorhead v. United States, 774 F.2d 936, 941 (9th Cir.1985). Read in this way, section 6103 is clearly designed to protect the information flow between taxpayers and the IRS by controlling the disclosure by the IRS of information received from taxpayers.

The legislative history of section 6103 indicates Congress's overriding purpose was to curtail loose disclosure practices by the IRS. Congress was concerned that IRS had become a "lending library" to other government agencies of tax information filed with the IRS, and feared the public's confidence in the privacy of returns filed with IRS would suffer. See 122 Cong.Rec. 24013 (1976) (remarks of Sen. Weicker).1 The Senate Report explained: "[T]he IRS probably has more information about more people than any other agency in this country. Consequently, almost every other agency that has a need for information ... logically seeks it from the IRS." S.Rep. No. 938, 94th Cong., 2nd Sess. 316-17, reprinted in 1976 Code Cong. & Admin.News 2897, 3746. Congress also sought to end "the highly publicized attempts to use the Internal Revenue Service for political purposes" involving delivery of tax returns to the White House by the IRS, see 122 Cong.Rec. 24013 (1976) (Remarks by Sen. Dole); and to regulate "the flow of tax data from the IRS to State Governments ..." Id. (remarks of Sen. Weicker). In short, section 6103 was aimed at curtailing abuse by government agencies of information filed with the IRS. See S.Rep. No. 938, 94th Cong., 2nd Sess. 318-19, 345, reprinted in 1976 Code Cong. & Admin.News 3747-48, 3774-75; see also Chamberlain v. Kurtz, 589 F.2d 827, 835 (5th Cir.1979).

At the same time, Congress realized tax information on file with the IRS was often important to other government agencies. Revised section 6103 represents a legislative balancing of the right of taxpayers to the privacy of tax information in the hands of the IRS and the legitimate needs of others for access to that information. See United States v. Bacheler, 611 F.2d 443, 446 (3rd Cir.1979).

Consistent with the legislative history, the elaborate disclosure procedures of section 6103 are directed to controlling the distribution of information the IRS receives directly from the taxpayer--information the taxpayer files under compulsion and the threat of criminal penalties. See S.Rep. No. 938, 94th Cong., 2nd Sess. 328, reprinted in 1976 Code Cong. & Admin.News 3757. Section 6103 establishes a comprehensive scheme for controlling the release by the IRS of information received from taxpayers to discrete identified parties, subject to specified conditions.2 As the district court noted, the statutory definitions of "return" and "return information" to which the entire statute relates, confine the statute's coverage to information that is passed through the IRS.3 The companion Treasury regulations, similarly, are exclusively concerned with disclosure by the IRS. See Treas.Regs. Secs. 301.6103(a)-1 to (p)(7)-1 (1986).

That is as far as the statute goes. Contrary to appellant's contention, there is no indication in either the language of section 6103 or its legislative history that Congress intended to enact a general prohibition against public disclosure of tax information.

Appellant relies upon subsection (a), the general confidentiality provision of section 6103, pointing out that it prohibits disclosure by an employee of the United States "of any return or information obtained in any manner " (emphasis added). Focusing on this phrase alone, however, ignores the central fact evident from the legislative history, structure, and language of section 6103 (including the definitions of "return and return information") that the statute is concerned solely with the flow of tax data to, from, or through the IRS.4

Appellant relies upon dictum in Association of American R.Rs. v. United States, 371 F. Supp. 114, 117 (D.D.C.1974) that the purpose of the protection afforded tax data by sections 6103 and 7213 "would be meaningless if such protection were not extended to copies of tax returns and to the pertinent data and information in the hands of the taxpayer."5 It is quite clear, however, that this was not Congress's view when it revised section 6103. Thus, for example, the Senate report expressly disclaimed any intention "to limit the right of an agency (or other party) to obtain returns or return information directly from the taxpayer through the applicable discovery procedures," (S.Rep. No. 938, 94th Cong., 2nd Sess. 330, reprinted in 1976 U.S.Code Cong. & Admin.News 3759; accord United States v. Art Metal-U.S.A., Inc., 484 F. Supp. 884, 887 (D.N.J.1980)), and courts generally have held the restrictions of section 6103 inapplicable to discovery of tax data in the hands of the taxpayer. See, e.g., Heathman v. District Court, 503 F.2d 1032, 1035 (9th Cir.1974).

Appellants argue a broader interpretation is necessary to achieve Congress's goal of guaranteeing the confidentiality of tax information in order to encourage full and honest reporting of income tax. See S.Rep. No. 938, 94th Cong., 2nd Sess. 318, reprinted in 1976 Code Cong. & Admin.News 3747; Church of Scientology of Cal. v. IRS, 792 F.2d 153, 158-59 (D.C.Cir.1986) (en banc), cert. granted, --- U.S. ----, 107 S. Ct. 947, 93 L. Ed. 2d 996 (1987). But Congress intended only, in the words of Senator Weicker, that "[e]ach taxpayer should be confident that the filing of his or her tax returns in no way compromises the right of privacy." 122 Cong.Rec. 24013 (1976) (emphasis added). Nothing in the statute or its legislative history suggests an intention to protect a taxpayer's financial data from any potential risk of disclosure except that arising from the filing of the taxpayer's return with the IRS.

Appellant's interpretation would also render the statute excessively burdensome. Section 6103 would become the sole means by which the government could obtain tax information legitimately. If a government employee obtained tax information directly from the taxpayer, through discovery or a subpoena, or in any other appropriate way, and subsequently disclosed that information, the government would be subject to criminal and civil penalties. Government employees could protect themselves only by securing the information through the cumbersome procedures of section 6103. Section 6103 was not designed to provide the only means for obtaining tax information; it simply provides the only means for acquiring such information from the IRS.

This is not to say that appellant has no remedy for the alleged unlawful seizure and subsequent use of his tax information. Those issues can be addressed in Stokwitz's Bivens action, or through any other applicable tort action. The confidentiality of tax information may also be preserved in civil proceedings through protective orders. See Premium Service Corp. v. Sperry Hutchinson Co., 511 F.2d 225, 229 (9th Cir.1975).

Since section 6103 applies only to information filed with and disclosed by the IRS, and Stokwitz's tax returns were not obtained directly or indirectly from the IRS, we affirm.

AFFIRMED.