Full opinion text
FINDINGS OF FACT AND CONCLUSIONS OF LAW KOPF, District Judge. Terry and Pat Jones, and the companies they own, seek damages pursuant to 26 U.S.C. § 7431(e) in their suit against the United States based on an Internal Revenue Agent’s disclosure of tax return information to a confidential informant which allegedly resulted in damage to the Joneses and their companies. Following a bench trial and subsequent briefing by the parties on the issue of damages, I now issue my findings of fact and conclusions of law in accordance with Federal Rule of Civil Procedure 52(a). For the reasons set forth below, I find and conclude that judgment should be entered against the United States and in favor of Terry and Pat Jones for much, but not all, of the damages they seek. I. BACKGROUND During the liability phase of this litigation, I concluded that (1) IRS Special Agent Angelo Stennis violated the provisions of 26 U.S.C. § 6103(a) when he disclosed to a confidential informant on January 31, 1990, that “a search warrant [is] going to be executed. Be cautious over the next several days, and if there [are] any problems that oecur[ ] or anything that [you] perceive[ ] as a threat from anyone at Jones Oil, ... let [me] know”; (2) the disclosure was not exempted by the provisions of 26 U.S.C. § 6103(k)(6); and (3) because the taxpayers failed to prove Agent Stennis’ disclosure was based on a bad-faith misinterpretation of section 6103(k)(6), the United States had no lability to the plaintiffs pursuant to 26 U.S.C. § 7431(b). Jones v. United States, 898 F.Supp. 1360, 1387-88 (D.Neb.1995) (Jones I). The Eighth Circuit Court of Appeals agreed with my conclusions regarding section 6103, but reversed on the “bad-faith” issue, holding that the United States bears the burden of proving good faith under 26 U.S.C. § 7431(b), as opposed to the plaintiff bearing the burden to prove bad faith. Jones v. United States, 97 F.3d 1121, 1124-25 (8th Cir.1996) {Jones II). Thus, the case was remanded for a determination of whether the United States had met the burden of demonstrating that Agent Stennis’ actions met the objective standard of “good faith.” Id. at 1125. On remand, I found that the United States failed to prove that Agent Stennis’ actions met the objective standard of “good faith,” revoked the previous judgment in favor of the United States, found in favor of the plaintiffs and against the United States on the issue of liability, and referred this matter to Magistrate Judge Piester for expedited progression regarding trial on damages. Jones v. United States, 954 F.Supp. 191, 195 (D.Neb.1997) {Jones III). After a three-day bench trial on damages and subsequent briefing by the parties, this matter is now ripe for decision. II. FINDINGS OF FACT Because the facts of this case on the issue of liability are set out in detail in my prior opinions, I shall not repeat them here. Jones I, 898 F.Supp. at 1365-72 (part I.B., findings 1-82); Jones III, 954 F.Supp. at 192 (amending previous factual findings to conform to stipulation that Agent Stennis never had any direct contact or run-ins with Terry Jones). I simply incorporate those findings herein as if I had set them forth verbatim. I will focus on the evidence presented to me during the damages trial. However, a brief summary of my previous decision is helpful to put the damage issues in context. I previously found that the government is liable to the plaintiffs because an IRS criminal investigator unlawfully told a confidential informant that the government intended to execute a search warrant at the plaintiffs’ place of business. Jones III, 954 F.Supp. at 193-95. Specifically, the agent told the informant the day before the warrant was executed that: “a search warrant [is] going to be executed. Be cautious over the next several days, and if there [are] any problems that occur[ ] or anything that [you] perceive[ ] as a threat from anyone at Jones Oil, ... let [me] know.” Jones I, 898 F.Supp. at 1379. In context, this “disclosure amounted to notification that the tax returns of Terry Jones and Jones Oil were ‘subject to other investigation or processing,’ as defined by 26 U.S .C. § 6103(b)(2).” Id. at 1379-80. Jones Oil Company 1. Terry Jones graduated from the business college at the University of Nebraska at Lincoln in 1958, after which he became employed as credit manager with the Television Service Company, a manufacturer and distributor of television antennas, radios, and citizen band radios. He remained with that company — which ultimately became HyGain Electronics — for 15 years, during which he was promoted to controller and operations vice-president. Terry Jones also operated residential and commercial real estate businesses in Lincoln, Nebraska; owned thousands of acres of farmland in Nebraska, Kansas, and Texas; and published television repair and amateur radio operator manuals. Terry and.Patricia (Pat) Jones have purchased, built, and operated apartments since 1965; operated NCB, a service to recover insufficient-fund checks; and owned a publishing company. (Tr. 20:12-26:11; 63:1-20; 87:21-22.) 2. In the time frame relevant to this lawsuit, Terry and Pat Jones owned a partnership called Jones Petroleum, with Terry owning 49 percent of the interest and Pat owning 51 percent. Jones Petroleum owned a holding company called J.O. Holding, Inc., which in turn owned several other entities, including Jones Oil Company, Inc., a Nebraska corporation, and Jones Publishing. (Tr. 31:5-20; 47:5-14; 109:11-110:4; Ex. 72.) Terry and Pat Jones controlled all of the Jones’ entities through their holding company. (Tr. 153:6-7.) During the relevant time frame, J.O. Holding, Inc., filed a consolidated tax return which included Jones - Oil Company as a subsidiary. (Tr. 444:6 — 23; Ex. 61.) 3. Pat Jones was a board member, officer, and owner of Jones Oil Company and served as Terry Jones’ “administrative assistant” with that company. In fact, she owned a controlling interest in Jones Oil by virtue of her 51-percent interest in the holding company. (Tr. 172:5-20; Ex. 61 at Statement 18 (disclosing in Consolidated Corporate Income Tax Return that Pat Jones owned 51 percent of the holding company for tax year ending October 31, 1990).) However, her focus was overseeing the Jones’ apartments and a cheek recovery company. (Tr. 63:10-20; 172:25-173:5; 410:3-22.) Pat Jones was also a joint taxpayer with her husband, Terry. (Tr. 190:15-22; Ex. 68.) 4. In 1975, Terry Jones purchased an oil jobber or distributorship which owned five or six gasoline stations and had four to six customers that used gasoline in large quantities. At that time, Jones also purchased property at the corner of 33rd and Cornhusker Streets in Lincoln, Nebraska, to be used as the office for Jones Oil Company. (Tr. 27:2-29:5.) 5. Jones continued to purchase gasoline stations — eventually acquiring 20 at one point — and gained additional customers for Jones Oil’s petroleum products through a telemarketing sales staff. These petroleum products included gasoline, diesel fuel, aviation fuel, and heating oil. From 1975 to February 1990, Jones Oil Company increased its annual sales from 1.5 million to approximately 15 million dollars. (Tr. 27:2-30:18; 32:10-14.) 6. Jones Oil operated by having credit arrangements with various Gulf Coast refineries that allowed common carriers working for Jones Oil to obtain petroleum products on preapproved credit from the “common carrier pipeline” — a pipeline into which all refineries place the same product and which is accessible by terminals placed approximately every 50 miles throughout the United States. Each refinery places the same product into this pipeline, but puts additives in the product upon its withdrawal from the terminal so as to create its own product or brand. Jones Oil typically would determine the lowest-priced product each day via daily faxes from the 20 to 30 refineries with which it did business and would then dispatch common carrier trucks to withdraw fuel from approximately 200 terminals throughout the United States for delivery to the customers who were paying the highest prices in the geographic region. (Tr. 32:15-36:12.) 7. Jones Oil had credit arrangements with “all the refineries” which were obtained through the refineries’ area representatives after the refineries reviewed Jones Oil’s financial statements and “morals ... character ... [and] integrity.” Terry Jones testified that the latter three factors were important because the terminals described above were not attended during nights and weekends, and common carriers were authorized to enter the terminals with a key and were trusted to withdraw the proper amount of fuel on Jones Oil’s behalf. These credit arrangements were memorialized with letters of credit containing a certain credit limit and discount factor of “[o]ne percent, 10 days”— that is, Jones Oil got a one-percent discount if it paid for the product within 10 days. (Tr. 36:16-40:20, 55:14-56:19; Exs. 21, 25, 26, 28-30.) 8. Jones Oil required the customers to whom it delivered petroleum products to pay for the products within 30 days. In order to bridge the gap between the time Jones Oil was required to pay the refineries and the time Jones Oil’s customers paid it, Jones Oil had a line of credit of 1.5 million dollars with FirsTier Bank in Lincoln. In order to obtain that line of credit, Jones Oil pledged its accounts receivable to FirsTier. (Tr. 40:21-42:8.) Specifically, FirsTier would extend Jones Oil an 80-percent line of credit on the value of each day’s invoices. Jones Oil would use that 80 percent to pay the refineries within 10 days in order to receive a discount, and Jones Oil would pay off the FirsTier loan at the end of the customers’ 30-day period and would retain the remainder as profit, from which the fixed expenses of Jones Oil’s operation were deducted. 9. This method of operation was successfully in place at Jones Oil from the late 1970’s to February 1990, and at no time during that period was Jones Oil in default with FirsTier or behind on refinery payments such that Jones Oil could not get the 10-day discount. (Tr. 42:9-44:4; 57:16-20.) At no time prior to February 1990 did any refinery terminate its credit arrangement with Jones Oil, nor or did anything happen in Terry Jones’ business or personal life that would have called into question his reputation, character, or integrity with respect to his business dealings with the refineries. (Tr. 56:20-57:20.) 10. In 1989 Jones Oil had 2,200 to 3,300 customers who regularly purchased petroleum products from Jones Oil; had a sales staff of 15 to 20; and sold its products in 23 states. (Tr. 48:18-53:25.) In the same year, Dun & Bradstreet, Inc., rated Jones Petroleum Company “3A1,” which meant that Jones Oil had an estimated financial strength of $1,000,000 to $9,999,999 with a “high” composite credit appraisal. (Tr. 57:24-60:25; Ex. 9.) Events Prior to and During Execution of Search Warrant 11. IRS Special Agent Angelo Stennis disclosed to a confidential informant on January 31, 1990, that “a search warrant [is] going to be executed. Be cautious over the next several days, and if there [are] any problems' that occur[ ] or anything that [you] perceive[ ] as a threat from anyone at Jones Oil, ... let [me] know.” Jones I, 898 F.Supp. at 1387. R. Lucchino worked for Jones Oil at one time and Plaintiffs suspect he is one of the two confidential informants. Id. at 1370 (finding 51). 12. Agent Stennis made this disclosure to one confidential informant because Stennis had a long-term professional relationship with the informant; Stennis viewed the informant as trustworthy, accurate, articulate, businesslike, and as someone who could be helpful in the future regarding any motor fuel excise tax problem; the informant had relayed to Stennis on “several occasions” that he felt threatened by “people from Jones Oil; 1.e., lawsuits that had been filed or drive-bys of his office”; and the informant had previously suffered an anxiety attack while operating in an undercover capacity for Stennis. While the confidential informant did not indicate a desire for revenge against Jones Oil while Stennis worked with the informant, “[h]e was obviously not happy with Jones Oü or Terry Jones.” (Tr. 593:3-594:23; 595:12-19; 596:1-11; 597:2-20; 597:2-8.) Stennis testified that the informant never mentioned contacting the media, and if he had, Stennis would have ended their relationship. (Tr. 598:1-19.) Agent Stennis does not recall talking to the confidential informant on February 1, 1990, the day of the IRS seizure at Jones Oil. (Tr. 599:1-5.) 13. As previously found in Jones I, 898 F.Supp. at 1370-72, John Sims (a ear dealer who operated his business from an office adjacent to the offices of Jones Oil) taped part of a telephone call he received from Ricardo A. Lucchino in the afternoon of February 1, 1990, during which “R. Lucchino ‘just basically took credit for the actions that had happened that morning ... talking about how he or his people ... notified the media to come down with their cameras....’” Jones I, 898 F.Supp. at. 1371 (finding 67). Terry Jones, who also listened to the tape, “remembered that R. Lucchino Vas divulging the fact that the IRS was there, and that he took full credit for them being there and the investigation.’ ” Id. at 1372 (finding 69). “According to Jones, R. Lucchino also ‘took full credit for the press being there, [he] was elated.’ ” Id. at 1372 (finding 70). 14. During the day-long execution of the IRS search warrant on Jones Oil Company on February 1, 1990, Terry and Patricia Jones told the agents that taking the company’s computers would destroy their business. As a result, the Joneses were authorized to purchase a new computer that day and copy the company’s files, including customer lists, onto the new computer in order to keep Jones Oil “in business.” The files they were allowed to copy onto the new computer “contained the critical information necessary to conduct sales” and to allow Jones Oil to continue to operate. (Tr. .71:25-74:12.) Of the 300 boxes of documents taken from Jones Oil by the IRS agents, “none of them” were critical to the continuing operation of Jones Oil Company. (Tr. 73:10-74:12.) Before the IRS began to transport the documents it had seized to Indiana, Pat Jones and various Jones Oil staff members were allowed to retrieve approximately half of the company’s 1990 sales order forms, check registers, correspondence, and invoices from the filing cabinets the IRS agents had seized because the scope of the search warrant did not include 1990 records. (Tr. 182:2-183:23.) Between February 1990 and October 1991, Pat Jones and Jones Oil staff traveled three times to Indiana, where the IRS allowed them to retrieve records that exceeded the scope of the warrant and that were necessary for Jones Oil to continue operating. (Tr. 186:17-188:20.) 15. As previously established in this litigation, a television station that employed Michael McKnight, an investigative reporter, broadcast McKnight’s videotaped news story of the IRS activity at Jones Oil during the evening news on February 1, 1990. Jones I, 898 F.Supp. at 1371. 16. The IRS does not try to attract media attention when it coordinates and performs searches; rather, the IRS attempts to be “inconspicuous.” (Tr. 574:16-575:8.) When the media “appears during [a] search ... they are a disruption and a distraction, and ... we don’t encourage them to come.” (Tr. 574:18-21.) 17. In 1990, the average daily traffic volume at the intersection nearest to the Jones Oil offices at 33rd and Cornhusker streets was 1,600 on the northern leg of the intersection; 28,800 on the eastern leg; 10,300 on the southern leg; and 35,000 on the western leg. The “peak” morning hour for traffic is from 7: 10 a.m. to 8:15 a.m. (Tr. 531:10-533: 10; Ex. 540.) One passerby who had performed pest-control services for Jones Oil in the past testified that, on the morning of the IRS seizure at Jones Oil, “people were just moving stuff out. It looked like they were moving. Looked like it was moving day.” It was not until he saw the media account that night that the passerby realized something other than “moving day” had occurred at Jones Oil. (Tr. 581:13-582:17.) 18. Most of the refineries with which Jones Oil conducted business had representatives in Nebraska who worked out of their homes and served as area representatives. (Tr. 517:1-15.) Jones Oil After February 1, 1990 19. Jones Oil opened for business at 8:00 a.m. on February 2, 1990, and all but one of the Jones Oil Company sales staff reported for duty. Jones Oil had everything necessary to conduct business as usual the day after the IRS search — i.e., the computer database, working telephones, the business premises, and personnel. (Tr. 74:13-76:6.) Because Terry and Pat Jones had sent their employees home the previous day due to the IRS search and because the Joneses had seen a news account of the search and seizure on television the night of February 1, 1990, the Joneses held a sales staff “rah-rah-rah” meeting first thing on February 2,1990, in an effort to convey to their employees that “we are going forward, we don’t do anything wrong, and get in there and work hard, and we’ll solve this problem.” The news broadcast of the IRS raid on Jones Oil was a topic of discussion at the meeting, and one employee asked Terry Jones at that time why he did not tell the employees this was going to happen. (Tr. 75:14-20; 80:7-81:12; 426:12-17.) 20. Within “an hour or two” after opening its doors, Jones Oil received a multi-page fax from Triangle Refinery in Houston, Texas, canceling sales from terminals in five states. Triangle Refinery was one of the refineries with which Jones Oil previously had a credit arrangement that allowed Jones Oil to pull product from the common carrier pipeline on Triangle’s behalf. Jones Oil previously had sales acknowledgments from Triangle promising that Triangle would sell Jones Oil a certain amount of product over a certain period of time at rune different terminals. The fax sent by Triangle to Jones Oil on February 2,1990, consisted of copies of those acknowledgments, with the words “CAN-CELLED FEBRUARY 2, 1990” typed across each of them. (Tr. 76:7-77:20, 79:14-80:6; Exs. 44A-I.) 21. “[Smarting almost immediately” after Jones Oil opened for business on February 2, 1990, the daily faxes the company always received quoting prices at various terminals “tended to thin out and not be available” and “[e]ventually disappeared.” (Tr. 81:17-82:14.) Terry Jones testified that “starting almost immediately, there [were] telephone calls from various refineries to me or to my vice-president” stating “that when the IRS would write me a letter and say that I did nothing wrong, that they would be glad to get back in bed with me, but until such time, I was out of business so far as they were concerned.” (Tr. 81:17-25; 125:2-8.) 22. Newspapei's in Lincoln, Omaha, Grand Island, Beatrice, Norfolk, Kearney, and Nebraska City, Nebraska, carried news stories generated by the Associated Press about the IRS activity at Jones Oil on February 3, 4, and 8,1990. (Tr. 86:19-87:13; Exs. 36-43.) After the initial television news account of the Jones Oil story, WOWT (the television station that broadcast the news account) repeatedly used file footage of the Jones Oil seizure on its advertisements. (Tr. 359:8-360:2.) 23. Whereas Pat Jones was not involved in the day-to-day management of Jones Oil prior to February 1, 1990, she spent 80 percent of her time performing “crisis management” at Jones Oil after that date, causing the Jones’ apartment and check-collection business to “suffer[ ].” (Tr. 189:12-190:4.) 24. Although FirsTier did not cancel its credit arrangement with Jones Oil after the IRS search and seizure on February 1, 1990, sales at Jones Oil in February 1990 dropped approximately 80 percent from the previous month due to Jones Oil’s inability to find “significant” customers after that date. (Tr. 82:21-83:15, 85:5-6; Ex. 58 & 58A.) According to analysis, of Jones Oil’s monthly gross sales compiled from monthly internally-prepared financial statements, Jones Oil’s monthly gross sales in January, 1990, were $1,854,301, and February, 1990, sales were $356,316. (Tr. 208:17-211:10; Ex. 58 & 58A.) 25. After February 1, 1990, Jones Oil operated primarily on government contracts, which before that date had comprised only 10 percent of its business. Because Jones Oil no longer had access to terminals, it was required to perform these government contracts by getting product supply from other “jobbers” like itself and taking an additional price mark-up. (Tr. 83:16-85:25.) Jones Oil was never able to recapture the customers on its customer list after February 1, 1990, and the government contracts eventually became unworkable and had to be canceled due to the government’s inability to pay in 30 days, as Jones Oil’s private customers had always done. (Tr. 85:1-86:18.) 26. From November, 1988, to January, 1990, Jones Oil had average monthly gross sales of $1,285,415. From February, 1990, to December, 1990, Jones Oil’s average monthly gross sales were $287,015. (Tr. 213:18-214:16; Exs. 58 & 58A.) When Jones Oil was engaged in “crisis management” after February 1, 1990, it “went from 50, 60 employees down to three or four or five.” (Tr. 326:18-20.) During this time, Jones Oil moved from the offices it could no longer afford to the Jones’ apartments, where Jones Oil was operated out of an apartment. (Tr. 438:15-25.) 27. Jones Oil’s last day of business was December 3, 1990, and the company’s books were officially closed on December 31, 1990. (Tr. 190:5-14.) 28. An insurance broker, Robert K. Marshall, who sought Mr. Jones’ commercial insurance business in 1986 was able to obtain quotes from underwriters to present a proposal to Terry Jones at that time. When the same agent attempted to prepare a similar proposal in the summer of 1990, the agent was unable to obtain any quotes from the insurance companies he regularly contacted for such information. Five of the underwriters the agent contacted for quotes in 1990 asked the agent whether the insured was “the same Terry Jones, Jones Oil, that was in the media this year.” These underwriters were located in the Lincoln and Omaha, Ne-braská, area. (Tr. 159:24-160:8; 160:24-163:17; 167:4-17; 169:25-170:16.) 29. Prior to 1990, Jones Oil Company had been audited two or three times in the area of excise tax. The fact of such audits had never before led to adverse publicity regarding Jones Oil. (Tr. 523:6-25.) Expert Testimony Regarding the Failure of Jones Oil and Associated Monetary Damages 30. John N. Chapin, Jr., is the Managing Director of Litigation and Forensic Service Practice in the Midwest for KPMG Peat Marwick. He was formerly a principal at Coopers & Lybrand where he served as Partner in Charge of Litigation and Claims Services Practice in the Midwest. Chapin has a Bachelor of Science in business administration and an M.B.A. from the John L. Olin School of Business at Washington University in St. Louis. He also attended the Advanced Industry School of Banking and Finance at Rutgers University in New Jersey. Chapin is a certified fraud examiner and certified management consultant, and has authored numerous publications and presentations regarding financial analysis as it relates to damage claims, litigation decision-making, the litigation process, and computers. (Tr. 215:11-217:21; Ex. 74.) I found him to be very credible, and, in the main, I found his testimony to be convincing. Except for the issue of causation, and a few minor points, the- government elected not to challenge much of Chapin’s testimony on the valuation of the loss. The government called no expert to contradict Chapin. 31. As part of his occupation, Chapin conducts financial analyses related to damage claims of failed businesses, as well as industry and economic analyses of businesses. As part of these analyses, Chapin studies business conduct within certain industries and examines the viability of businesses through review of sources of income, cash flows, markets, and future plans and programs. (Tr. 217:23-218:23.) 32. Chapin performed a financial analysis of Jones Oil Company based upon financial records and other documents provided to him by Terry Jones, as well as information he gathered from Terry Jones and Jones Oil’s accountant. (Tr. 218:24-219:23.) Based .upon this analysis, Chapin reported findings and conclusions concerning the value of the loss of Jones Oil Company and the potential reasons for its demise or failure. (Tr. 221:10-223:224:6.) 33. In association with John Chapin, Terry Jones provided information on 21 factors relevant to business failure as those factors applied to Jones Oil. (Tr. 88:9-23; 215:11-14; Ex. 539A.) Chapin began using these factors in 1990 based upon his experience in analyzing companies that have failed. (Tr. 237:13-238:1.) The court’s findings regarding each of these factors as they applied to Jones Oil immediately prior to the IRS actions against Jones Oil appear below: a. Technology: There has been virtually no change over time in the composition of the product being sold — gasoline. (Tr. 89:8-24.) This product is stable and in continuous demand. (Tr. 228:21-22.) b. Changes in the Competitive Environment: Jones Oil’s method of doing-business (purchasing the lowest-priced product based on daily prices and selling the product to the highest-paying customers) enabled Jones Oil to be profitable by offering the lowest price among its competitors. Thus, there were no changes in the competitive environment during 1989 and 1990 that affected Jones Oil’s ability to be profitable. (Tr. 89:25-91:1.) e.Sensitivity to Economic Conditions: Because Jones Oil’s customer base was so diverse, a failure of one market segment to purchase fuel at a particular time would have had no effect on the company’s overall productivity. (Tr. 91:2-19.) d. Eroding Profit Margins: Jones Oil did not have eroding profit margins or systemic problems with the purchase and sale of petroleum products that would have affected the company’s profitability during 1989 and 1990. (Tr. 91:19-92:12.) e. Government Regulation or Change in Taxing Structure: Any government regulation or tax structure change which may have been imposed at the relevant time would have applied to the entire oil distributorship industry, so this factor would have had no effect on Jones Oil’s ability to remain a viable operation after February, 1990. (Tr. 92:13-93:4.) f. Fluctuation in Raw Material Prices: The refineries from whom Jones Oil purchased its product sold their product at the same relative price at any given time, and any price difference between refineries was based on supply and demand. Jones Oil’s marketing strategy “took advantage of the people that wanted to get rid of that product.” (Tr. 93:5-24.) Further, Jones Oil did not purchase raw materials; it purchased products and jobbed them. (Tr. 230:24-231:1.) g. Environmental Litigation: Jones Oil was not involved in any environmental litigation in the relevant time frame. (Tr. 93:25-94:7.) An environmental review had been done of all the Jones’ gas stations and properties. (Tr. 231:7-11.) h. Product Liability Litigation: Jones Oil was not involved in any product liability litigation in the relevant time frame. (Tr. 94:8-17.) i. Loss of Key Employees: From 1989 to 1990, Jones Oil did not lose key employees. (Tr. 94:18-95:1.) While Jones Oil lost three sales people in the mid-1980’s who went to work for another oil company, Rock Port Oil, Jones Oil’s profits remained constant. (Tr. 137:14-139:5.) Ricardo Lucchino, a former Jones Oil employee, went to Rock Port in 1988. At that time, Jones Oil and Rock Port began competing for telemarketers. (Tr. 157:1-10.) Based on Chapin’s experience of evaluating sales organizations, Chapin opined that Jones Oil did not suffer abnormal employee losses which would have impacted its business. (Tr. 231:23-232:7.) j. Poor Labor or Management Relations: Terry Jones’ relationship with his employees was good during the relevant time frame. Jones Oil was a nonunion shop and there were “no contracts or strikes” that affected Jones Oil. (Tr. 95:2-15.) k. Limited Source of Supply or Supplier Failure: Jones Oil did not suffer a lack of supply during the relevant time period, and because Jones Oil purchased from a variety of suppliers, if one “was down for some reason or another, it had no effect” on Jones Oil. (Tr. 95:16-96:2.) l. Long-Term, Supply Contracts at Significantly Above Market Price: Jones Oil entered into supply contracts based on quantity, not price, and the price fluctuated daily. Therefore, this factor did not affect Jones Oil. (Tr. 96:3-13.) m. Poor Credit Rating or High Cost of Funds: Jones Oil’s Dun & Bradstreet credit rating has consistently been “3A1.” (Tr. 96:14-97:7; Exs. 9 & 10 (D & B credit reports for 1986 & 1989).) n. Poor Cash Management and Inadequate Cash Flows: Prior to February 1990, Jones Oil had no difficulties with cash management, as Terry Jones “spent [his] entire life working in that area.” (Tr. 97:8-16.) o. Dependence on New Sales Persons: Just prior to February 1990, Jones Oil had 15 to 20 sales people and did not have any “unusual dependence on a few sales people.” (Tr. 97:17-98:4.) p. Decrease in Market Share: Jones Oil’s market share was dependent upon the price it chose for its product. Petroleum products like those sold by Jones Oil were very price elastic, meaning that Terry Jones could greatly increase his market share simply by lowering his price a quarter to half cent per gallon. Thus, market share was in Jones Oil’s control to a large extent. (Tr. 98:5-99:8.) q. High Turnover of Sales Force: In 1989 and early 1990, Jones Oil had some new sales employees who would leave the company “very quickly.” However, “if they were good, they didn’t leave” and they became “longtime employees” who made high salaries. (Tr. 99:9-100:7.) While Jones Oil experienced turnover of employees, the rate of turnover remained constant from year to year. (Tr. 144:17-145:13.) r. Deteriorating Financial Condition of Customers: Because Jones Oil’s customer base was so diverse — including government, farmers, corporations, and institutions — the deteriorating financial condition of one type of customer would have “no effect.” (Tr. 100:8-19; 236:17-23.) s. Dependence on New Customers: Terry Jones’ business philosophy has always been that “[y]ou don’t ever put yourself into a position where you depend upon one customer for supporting your organization because if you lose that one customer, you’ll lose that business.... I have turned down business when the customer was too large for our organization.” (Tr. 100:20-101:9.) Chapin found that “no customer accounted for a double[-]digit percentage of the sales of Jones Oil Company.” (Tr.236:15-16.) t. Volatile Product Mix: Unlike electronic products, for example, the product life of petroleum products is infinite. (Tr. 101:10-22.) u. Credit Policies — Too Strict or Lenient: Jones Oil required financial statements from its customers, bank references, and, if their customers’ credit was “in any way tenuous,” Jones Oil required a letter of credit. (Tr. 101:23-102:16.) 34. Based upon the above 21-factor analysis, John Chapin opined that there was “nothing ... either externally or internally” prior to February 1, 1990, which made it likely that Jones Oil was in imminent danger of going out of business. (Tr. 227:12-25.) 35. After the February 1, 1990, IKS activity at Jones Oil and the news accounts and drop in sales that occurred in the weeks immediately following the IRS activity, the following factors from the above 21-point analysis were affected: a. Limited Source of Supply: Jones Oil’s supply of product ceased because “all of the refineries got in touch with me or my organization and would not sell us product on credit, so we had no supply.” (Tr. 104:17-23.) b. Long-Term Supply Costs at Significantly Above Market Price: All long-term supply contracts with Jones Oil were canceled. (Tr. 104:24-105:6.) c. Inadequate Cash Flow to Support Operations: Without sales, Jones Oil could not meet payroll, leading Jones Oil to have inadequate cash flow to support operations. (Tr. 105:14-22.) d. Decrease in Market Share: After February 1, 1990, and the publicity and decrease in sales which followed, Jones Oil “had no market share.” (Tr. 106:3-6.) e. High Turnover of Sales Force: When Jones Oil could no longer get supply of petroleum products, there was a high turnover of its sales force. (Tr. 106:7-12.) 36. After his review of the above factors as they applied to Jones Oil, John Chapin found “nothing other than the release of confidential taxpayer information to a confidential informant, anonymous phone call, and the resulting publicity that led to the events that caused the demise of Jones Oil.” (Tr. 240:10-15.) 37. In response to the government’s “Daubert-Hke” causation objection to this testimony, the court found that: “[B]efore-and-after economic analysis, using the rule[-out] hypothesis, is customarily employed in economic fields to endeavor to establish causation.” (Tr. 240:16-19.) Therefore, the court found that the approach used by Chapin was generally sound. 38: John Chapin also valued and computed the loss of the demise of Jones Oil Company, concluding that Jones Oil suffered the following damages: $4,516,083 Loss of Jones Oil Company future-valued as of Jan. 31,1998 $ 78,854 Overpayment of petroleum taxes to Tennessee, future-valued to Jan. 81,1998 $ 565,356 Loss due to required liquidation of real property valued to Jan. 31,1998 $ 24,760 Loss due to required liquidation of personal property of J .0. Holding, Inc., future-val- , ued to Jan. 31,1998 $ 524,766 Loss in Jones Publishing, future-valued to Jan. 31,1998 $5,709,819 TOTAL DAMAGES AS OF JAN. 31, 1998 The method by which John Chapin derived the above figures is described below in separate paragraphs. (Exs. 65D (demonstrative exhibit only), 65E, 65E-1.) 39. Loss of Jones Oil Company: Of the three generally accepted approaches to valuing a business, Chapin chose the income or discounted cash flow approach. The income approach includes capitalization of earnings or discounted cash flow, whereas the cost or asset approach includes asset value, and the market comparable approach includes comparable sales. Because Jones Oil’s financial statements reflected a history of profitable operations and evidenced Jones Oil as a business which relied on people rather than capital assets to generate cash flows, Chapin rejected the cost or asset approach to valuation. Because Chapin was unable to locate comparables to Jones Oil for the relevant time frame, Chapin also rejected the market approach. (Tr. 241:8-242:10; Ex. 65E, App. B.) Chapin calculated Jones Oil’s cash flow from operations for fiscal years 1988 and 1989, applied a weighting factor of two to the cash flow for 1989 in order to account for recency, averaged those numbers, and reached an expected business cash flow in 1990 of $498,784. Chapin then applied a 22.7 percent capitalization rate to that expected cash flow to value Jones Oil Company as of October 31, 1989 (the company’s year end closest to the unlawful disclosure). The product of the capitalization rate was $2,197,-288; that is, the market would pay roughly 4.4 times the positive annual cash flow of $498,784 to buy a business like Jones Oil. Chapin then future-valued this amount to January 31, 1998, by increasing the amount monthly by the rate of return Jones would have received had he invested that sum in “Baa” bonds. The compounding factor was based on daily compounding at the monthly “Baa” bond rate. This future-value calculation resulted in a value of Jones Oil at January 31,1998, of $4,516,083. (Ex. 65E & 65E-1.) 40. Overpayment of Petroleum Taxes to Tennessee: Jones Oil was required to pay oil excise taxes to the State of Tennessee during 1989 and 1990. Under Tennessee state law, refunds for overpayments of oil excise taxes must be claimed within a certain time period. Because of the IRS seizure that occurred at Jones Oil on February 1,1990, and the “damage control” activities of Jones Oil employees after that date, Jones Oil was unable to file its tax refund claim on time and such claim was denied as untimely. In his damages calculation related to the denial of Tennessee oil excise taxes for the 1989 and 1990 tax years, Chapin future-valued to January 31, 1998, the refund claimed for each of those tax years, again using the appropriate “Baa” bond rate, reaching a total of $78,854.17 for the 1989 and 1990 tax years combined. (Tr. 248:11-250:19, 322:5-326:24; Ex. 65E, App. C.) 41. Loss Due to Liquidation of Real Property: As discussed above, J.O. Holding was the holding company that owned Jones Oil J.O. Holding owned certain property that was used almost exclusively by Jones Oil in order to conduct its business operations, but these properties were carried on the J.O. Holding balance sheet. The properties that were liquidated as a result of the demise of Jones Oil were a gas station supplied by Jones Oil at 56th and Holdrege Streets and the office space used by Jones Oil at 33rd and Adams Streets in Lincoln, Nebraska. With regard to the latter property, the Joneses could not afford the mortgage payments, taxes, insurance, and maintenance costs as Jones Oil “lost more and more sales people.” In order to calculate the total real estate damages resulting from the sale of these properties, Chapin started with the fair market values of each property as reflected in appraisals prepared by a qualified appraiser as of a given date before the disclosure. He then determined the tax-assessed value on that same date. Next, he determined the tax-assessed value on the date of sale. He next determined the sales price for each property. He then assumed that the appraised value would have increased or decreased at a rate equal to the increase or decrease in assessed value. Both properties enjoyed an increase in assessed value. Therefore, for each property, he multiplied a factor representing the percentage of increase times the original appraised value to determine the market value of that property at the time of sale. He then compared the sale price of each property to the market value of each property. After that comparison was made, Chapin found that the properties had each sold for less than they were worth. Thus, the holding company had suffered a loss of $55,101 on one property and $280,384 on another. These loss figures were then future-valued (using the Baa bond rate) to January 31, 1998, resulting in a total loss of $565,356 on that date for both properties combined. (Tr. 250:20-253:9, 320:22-322:4, 374:13-375:4; Ex. 65E, App. D.) 42. Loss Due to Liquidation of Personal Property of J.O. Holding, Inc.: Personal property used by Jones Oil (but carried on the J.O. Holding balance sheet) to conduct its business — such as desks, chairs, and business office equipment — was sold at auction after the demise of Jones Oil. Chapin calculated the value of this loss by comparing the book value (cost less depreciation) of the equipment ($26,720) with the sale price of the equipment ($13,375), and determined that the loss was $13, 345. Using the Baa bond rate, he valued that amount as of January 31, 1998, reaching a total of $24,760. (Tr. 253:10-254:5; Ex. 65E, App. F.) 43. Loss in Jones Publishing: Chapin opined that the amount of invested capital that had been used to develop Jones Publishing, a start-up company, was a loss related to the demise of Jones Oil because the cash being generated by Jones Oil for use by Jones Publishing was no longer available after February 1, 1990. “There was no cash being developed in the oil company business because of its demise that would have helped in Jones Publishing, and other sources, other creditors, other investors[,] were unable to be found.” (Tr. 255:4-7.) Because Jones Publishing failed, Chapin took the amount of paid-in capital and loans from other sources that had been contributed to Jones Publishing and figured the investment that was lost in Jones Publishing was $275,447. Chapin future-valued that amount to January 31, 1998,' which totaled $524,766. Because Jones Publishing was a start-up company, he did not attempt to value its potential successes or speculate on its earnings. (Tr. 254:2-255:24; Ex. 65E, App. E.) Out-of-Pocket Losses to Terry Jones 44. Besides calculating damages for the above five categories, Chapin future-valued to December 31, 1997, trade and bank debt with respect to funds Terry Jones claims he paid personally after Jones Oil failed. In making these computations, Chapin did not opine whether Jones was entitled to reimbursement for this amount or whether it properly constitutes damages. Chapin calculated $754,345 as the amount of liability that existed upon dissolution of Jones Oil that was either paid personally by Terry Jones or remains outstanding. In reaching this total, Chapin applied the appropriate “Baa” bond rate to sums paid or owed to various oil companies and applied interest of $65.20 per day to a sum owed to FirsTier Bank. (Tr. 256:24-260:2; Ex. 510 (demonstrative only).) 45. Terry Jones also testified that he personally had a loan from First Federal Savings & Loan that he used as working capital for his various enterprises. Terry and Patricia Jones borrowed $1,000,000 personally, pledging as collateral the equity in their apartments. The Joneses then loaned the money to J.O. Holding, which disbursed funds as needed to the Jones’ various corporations. The Joneses entered into an agreement with First Federal regarding repayment of the loan after the demise of Jones Oil. While J.O. Holding has returned to the Joneses $712,000, there remains on the books of J.O. Holding a balance of $271,000 due to Terry and Patricia Jones personally. Terry Jones claims he is entitled to compensation for this amount as a result of the demise of Jones Ofl. (Tr. 338:15-340:13; Ex. 55.) Physical & Emotional Injury: Loss of Reputation 46. Terry Jones’ family has lived in Lincoln, Nebraska, for four generations. Jones and his “entire family” views having a reputation for honesty and integrity as “one of the most important things there are .... your reputation is about the only thing you can take to your grave.” (Tr. 345:8-16; 350:16-23.) Jones was a high school scholar, graduated from the University of Nebraska in Lincoln, and had conducted business and been involved in the community for many years. (Tr. 357:21-25; Exs. 4, 5, 34.) 47. Patricia Jones is a native Nebraskan who moved to Lincoln in 1961 and was married to Terry Jones in 1963. (Tr. 401:12-402.T1;411: 1-5.) Prior to February, 1990, she had numerous social connections in Lincoln and was professionally, socially, and phi-lanthropieally involved in the community. (Tr. 411:6-414:2.) The Jones’ reputation for honesty and integrity was something Pat Jones viewed as being a vital aspect of the Jones’ businesses and of her faith. (Tr. 415:1-18.) 48. Terry and Pat Jones had always dreamed of early retirement and they worked hard to achieve that goal. Prior to 1990, the Joneses had listed Jones Oil Company for sale with that goal in mind. (Tr. 417:12-20.) 49. Although Terry Jones had surgery in 1985 to correct an aortic aneurism and replace a heart valve that had a congenital defect in it, Jones was in good physical and emotional health prior to February, 1990. (Tr. 351:1-24; 379:10-382:18.) Likewise, Patricia Jones was in excellent mental health. (Tr. 416:13-417:2.) 50. When Terry Jones viewed the MeKnight news story on television the night of February 1, 1990, he “thought [he] was finished.” I thought we were all done. On the other hand, I had fought all my life. I came from the other side of the tracks from a financial standpoint. I had a very fine father and mother, but we never had any particular money, so I worked very hard. I worked 40 years to build these organizations, and I thought I had lost them immediately, and then when I e[a]me to in two or three days, I started working very, very hard to try and salvage everything that I could possibly salvage... I was so embarrassed and so humiliated.... I had spent my entire life being so proud of what I did and what I had become and what my wife and I — I have got the very, very, very best wife in the whole world. I felt so bad about the fact I hurt her, and I did. (Tr. 357:9-20; 362:16-20.) 51. At the time Terry and Pat Jones saw the television newscast, Mike MeKnight had the reputation of covering “high profile-type” stories in his “Cover Story” segment in which MeKnight “always looked like he was going around digging for dirt.” “Cover [S]tory to Lincoln, Nebraska, was probably like ... 60 Minutes was to the nation.” (Tr. 420:1-11.) To Pat Jones, the Jones’ appearance on Cover Story meant they were “now guilty until proven innocent.” (Tr.424:2-5.) 52. Prior to the Mike MeKnight newscast, Terry and Pat Jones had never been the subjects of adverse publicity. (Tr.420: 12-16.) 53. After the news account appeared on television on February 1, 1990, the Joneses suffered several social and financial consequences. The Joneses noticed that long-time acquaintances would “look the other way” when they saw the Joneses in public. (Tr. 358:6-12.) Social invitations from people the Joneses perceived to have been friends “came to a screeching halt” after February 1, 1990. (Tr. 435:7-436:5.) The Jones’ cleaning lady called them on the night of the IRS seizure, stating that she had seen the Joneses on television that evening, and she would not be coming back. (Tr. 361:15-362:9.) Business supplies for which Jones Oil had a charge account for 25 years were suddenly delivered COD. (Tr. 427:6-17; 428:13-19.) People with whom Patricia Jones had previously developed business contacts became nonresponsive and critical. (Tr. 429:12-430:9.) The Joneses were forced to refinance their apartments through friends. (Tr.358:14-23.) 54. Dr. Chester Paul, a vascular and burn surgeon at St. Elizabeth’s Hospital in Lincoln, has treated Mr. Jones’ medical conditions over the years and he and his wife have been long-time friends of the Joneses. (Tr. 375:17-22; 376:12-378:1.) After February 1, 1990, Dr. Paul observed Terry Jones gradually become reclusive, withdrawn, and “wast[ed] away” from not eating, leading Dr. Paul to conclude that Terry Jones was clinically depressed. (Tr. 384:8-386:4.) Dr. Paul found it necessary to prescribe anti-depressant medication to Jones as late as February of 1997. (Tr. 394:21-395:12.) Dr. Paul did not think that Jones had required or received antidepressant medication until after the disclosure. (Tr. 395:2-9.) Dr. Paul did not observe' “anything that would look like or appear to be a clinical depression in Terry Jones prior to February of 1990.” (Tr. 394:17-20.) 55. After February 1, 1990, Terry Jones slept only four hours per night. (Tr. 360:14.) According to Pat Jones, after February 1, 1990, Terry Jones would lay awake at night and mutter “at least three or four times a night... I wish I were dead.” (Tr. 439:4-9.) He quit showering and shaving. (Tr. 439:24.) 56. After February 1, 1990, Terry Jones lost his appetite, causing him to go from 185 pounds before the IRS seizure to 130 pounds in February, 1997, at which time he was hospitalized. (Tr. 360:8-361:10.) By February of 1997, seven years after the unlawful disclosure, Jones was “run[ ]down, emaciated, his protein mass was wasted, his immunity was bad, he couldn’t breathe, he couldn’t walk, he was purple-gray and anemic, and he got pneumonia and came in the hospital, and ... he was probably going to die.” (Tr. 386:5-9, Testimony of Dr. Paul.) Jones was unable to breathe upon his admission to the hospital because his failure to eat caused him to lose muscle mass, including the muscles that enabled him to breathe. (Tr. 388:21-389:5.) After Jones was admitted into the hospital, Dr. Paul prescribed Prozac to treat Jones’ clinical depression. (Tr. 387:22-388:11.) 57. After February 1, 1990, Pat Jones had trouble sleeping, questioned her deeply-held faith, and found it necessary to consult a psychiatrist after she had an emotional crisis. (Tr. 430:12-431:5.) The IRS was in on Thursday, and that Mike McKnight show aired, the [C]over [SJtory aired Thursday night.... [0]n Saturday morning, I got up and knew I had to go to work to make up for Thursday that we lost, and I got in the shower and I ... replaying that whole event was so painful, I know I ended up on the floor of the shower just sobbing, and what brought me around was the cold water, and I remember crawling out and crawling into bed, and I stayed there. I stayed there the whole day. And when the sun started to set, I knew I was not going to make it through the night. I knew I would kill myself.... (Tr. 431:8-432:24.) 58. The Joneses no longer have any immediate plans to retire and they are now “essentially back to where [they] were in ’63.” (Tr. 436:19-23.) Although the Joneses have now prevailed on the liability portion of this litigation, they do not feel generally redeemed in the eyes of the public. “Those types of parties, those types of invitations that we had ... before have never resurfaced. Those friends of ours that knew in their hearts that we had done nothing wrong continued to support us and have to this day, but I don’t — I don’t think that we can ever be in the community the way we were. We can never be whole. 22.) ” (Tr. 456:10- Results of the Investigation 59. Leo Curry, an employee of Jones Oil, was prosecuted and pled guilty as a result of the IRS investigation which involved Jones Oil. Although the government may have been able to make a case against the Jones Oil corporation because of Curry’s activities, the corporation was never charged. According to Agent Tinsley, “to pursue criminal charges against a company that was out of business and had no ability to pay a fine, were'one imposed as the result of a successful conviction, was a waste of the government’s time and resources.” (Tr. 562:1-21.) 60. The Joneses first learned they were no longer personally under investigation during a deposition with Agent Tinsley as a part of this litigation on April 15, 1994. (Tr. 441:4-15.) The government decided that “they shouldn’t be prosecuted.” (Tr. 583:25-587:15.) Put simply, the government had no evidence of wrongdoing on the part of Mr. and Mrs. Jones. 61. At the conclusion of the civil examination which was being conducted concurrently with the criminal investigation of Jones Oil, the government made a refund to the plaintiffs. The way this refund arose is somewhat complex. Initially, the IRS identified a $3,000,000 civil deficiency that was issued on Jones Oil Company and J.O. Holding, Inc. (Tr. 563:21-564:2; 578:8-579:10.) Then the IRS issued “closing letters” on November 6, 1995, for both Jones Oil Company, Inc., and J.O. Holding, Inc., stating that the correct tax liability for each entity after all asséss-ments had been made, corrected, and agreed to by all parties was $1,001,151 for Jones Oil Company, Inc., and $53,649 for J.O. Holding, Inc. These assessments were then netted against tax deposits and this resulted in a refund to the Joneses of approximately $415,-000. (Tr. 622:7-623:10; Exs. 86, 87, 88.) Thus, in the end, it was the government that owed the plaintiffs. III. CONCLUSIONS OF LAW I start with two observations. First, Terry Jones and Pat Jones have been grievously injured by their government. As a consequence, it is right that they be compensated to the full extent of their damages. Second, while an IRS criminal investigator made a , mistake, he did so out of a sincere desire to protect a confidential informant during a complex multi-state criminal investigation. As a result, it would be unjust to read this opinion as a reason to demonize the agent or the IRS. With that said, I turn to the specific damage issues raised by this difficult case. A. The Proper Recipients of Damages are Terry and Pat Jones. When I made my liability decision, I found “in favor of Plaintiffs and against the United States on the issue of liability.” Jones III, 954 F.Supp. at 195. The plaintiffs seek liquidated, actual, and punitive damages for one disclosure pertaining to Jones Oil, Terry Jones, and Pat Jones. Because of the complex, but perfectly legal, business arrangements of the plaintiffs, it is necessary to specify the proper recipients of any damage award. The plaintiffs are Terry Jones; Pat Jones; Jones Publishing, Inc., a corporation; Jones Oil Company, Inc., a corporation; J.O. Holding, Inc., a corporation; and Jones Petroleum Company, now known as Jones Apartments, a partnership. Terry Jones and Pat Jones owned the stock that controlled J.O. Holding. J.O. Holding in turn controlled the remainder of the corporations. It also appears that Terry and Pat Jones from time to time operated a partnership known as Jones Apartments and from time to time that partnership may have been the nominal holder of the stock in J.O. Holding. These business arrangements are further complicated by other factors. For example, Jones Oil Company has ceased doing business and may have been dissolved and J.O. Holding was the nominal owner of certain property that was liquidated as a result of the demise of Jones Oil Company. Given these complexities, the following question arises: What person or entity is entitled to receive the damages assuming that an award is appropriate? The plaintiffs have answered this question in their brief, and the government has not objected. ■After careful consideration, I adopt the position of the plaintiffs. Any award resulting from the demise of Jones Oil Company will be paid jointly to Terry Jones and Pat Jones, individually, as their interests may appear. Any award resulting from emotional distress damages sustained by Terry Jones will be paid to Terry Jones, individually. Any award resulting from emotional distress damages sustained by Pat Jones will be paid to Pat Jones, individually. B. “Return Information ... with respect to” Pat Jones Was Disclosed. While conceding for the sake of the damage trial that “return information” of Terry Jones and Jones Oil was improperly disclosed, the government now argues that there is no evidence that “return information” related to Pat Jones was disclosed. I disagree. The United States has liability if an IRS agent unlawfully “discloses any ... return information with respect to a taxpayer.” 26 U.S.C. § 7431(a) (emphasis supplied). The statute does not state that liability arises only if the taxpayer is identified by name. In fact, “return information” can be “any ... data ... with respect to the ... possible existence ... of liability ... of any person ... for any tax ... or offense.” 26 U.S.C. § 6103(b)(2)(A). Because of the broad definition of “return information,” the IRS tells its agents that a prohibited “disclosure may be either direct or indirect.” Jones I, 898 F.Supp. at 1380 (quoting Internal Revenue Service Manual). The disclosure here was “with respect to” Pat Jones, as well as Terry Jones and Jones Oil. The disclosure (essentially that a search warrant was going to be executed at Jones Oil), when interpreted in the context of all the discussions between Stennis and the informant, proclaimed that IRS criminal investigators were focusing on Jones Oil and its owners, including Pat Jones. First, Pat Jones filed joint individual tax returns with Terry Jones. A spouse who files a joint tax return is potentially hable for the taxes owed by the other joint taxpayer. See, e.g., Estate of Gryder v. Commissioner of Internal Revenue, 705 F.2d 336, 339 (8th Cir.) (spouse failed to meet her burden under 26 U.S.C. § 6013(e) and was therefore civilly liable for under-reported income on joint return; husband had been criminally prosecuted and convicted for filing false tax returns), cert. denied, 464 U.S. 1008, 104 S.Ct. 525, 78 L.Ed.2d 709 (1983). Thus, any disclosure pertaining to the investigation of Terry Jones was also “with respect to” Pat Jones, who was, at the very least, jointly hable for any unpaid taxes that he owed. Second, not only did Pat Jones face civil liability regarding the joint tax returns of Terry Jones, she also faced criminal liability for the acts of Jones Oil because she was so intimately involved with Jones Oil. She owned 51 percent of Jones Oil. She was also an officer of the corporation. Furthermore, she was director of the corporation. Still further, she functioned as an “administrative assistant” to Terry Jones, the president of Jones Oil. Thus, any unlawful disclosure pertaining to Jones Oil would also be “with respect to” Pat Jones since she had serious potential criminal exposure for the acts of Jones Oil under the, tax laws. See, e.g., United States v. White, 671 F.2d 1126, 1128 & 1134 (8th Cir.1982) (affirming corporation manager’s criminal conviction; the manager conspired to impede the ascertainment of corporate income taxes; he was responsible for the failure to properly disclose the true nature of the corporation’s revenues and expenses). Third, at the time of the disclosure, the government believed that Pat Jones was a target of the investigation. For example, the government knew that Pat Jones was married to Terry Jones, that she was “a vice president, secretary and the major stockholder of’ Jones Oil, and the government revealed this information to the judge who issued the search warrant. (Liability Trial, Ex. 3A (Redacted Search Warrant Affidavit at 3).) Still further, in the search warrant affidavit the government implied that records showing illegal activity involving Jones Oil might be “relocate[d]” in a building where “Terry Jones’ wife has an office.” (Id. at 18-19.) In addition, the agent in charge of this investigation admitted that “there wasn’t any doubt ... this investigation involved Terry and Pat Jones as joint taxpayers and Jones Oil Company.” (Liability Trial TV. 97:23-98: 1 (emphasis added).) Thus, the government knew or should have known that a wrongful disclosure “with respect to” Terry Jones or Jones Oil would also amount to a disclosure “with respect to” Pat Jones. In summary, I find and conclude that the unlawful disclosure was “with respect to” Pat Jones, as well as Terry Jones and Jones Oil. The disclosure was not merely wrongful because it disclosed the impending execution of a search warrant at Jones Oil. It was also wrongful because it disclosed to the informant the specifies of a criminal investigation of the Jones family. Such a disclosure had the capacity to, and in fact did, implicate Pat Jones in the public mind when the informant published it. Therefore, she is entitled to all the damages caused her personally by the disclosure. C. Because They Are Entitled to Actual Damages, the Plaintiffs are Not Entitled to Liquidated Damages. The law provides that liquidated damages are to be awarded if the plaintiffs did not sustain actual damages exceeding one thousand dollars. 26 U.S.C. § 7431(e)(1) (providing for the “greater of’ liquidated damages in the sum of $1,000 for each disclosure or “actual damages” and, in the case of a willful disclosure or a disclosure caused by gross negligence, punitive damages, plus the costs of the action). Because I find that Jones Oil, Terry Jones, and Pat Jones each sustained actual damages in excess of one thousand dollars, I will not award liquidated damages to them. D. The Plaintiffs Have Proven Causation for Actual Damages. I find and conclude that the unauthorized disclosure of tax return information caused actual damage to Terry and Pat Jones individually and as owners of Jones Oil Company. There is no question that the plaintiffs suffered some damage as a direct r