Neal v. U.S.

Citation: Neal v. United States, 5 Computer L. Serv. Rep. 913 (D.N.J. 1975).

In 1973, plaintiffs withholding was $910 more than his income tax. Plaintiff sued for a tax refund. Instead of a refund, however, plaintiff received a computer-generated notice that the money was being used to adjust his 1971 tax balance. The plaintiff asked for an explanation on three occasions, but received only a computer-generated form response.

The court noted that there was evidence that a number of similar erroneous notices were reported in that year, indicating a possible computer malfunction, The court issued an order compelling the Government to provide the plaintiff with details of credits to his withholding account, federal income tax assessed and the amounts of any refunds due for a three-year period. The court held that this information was vital to plaintiff's case and would prove or disprove the existence of a computer error. The court reasoned that under these circumstances, the Government's status was analogous to that of a retail merchant who, by law, must provide a customer with an explanation of a disputed bill, and to correct the bill if there was an error.