Siddiqui

Zariq and Greta Siddiqui, Joseph, Richard and Elizabeth Vullo, and Vullo, Siddi-qui & Associates, Ltd. (“VSA”) (collectively, “Appellants”) appeal from the district court’s limitation of its award under 26 U.S.C. § 7431 to a total of $6,000 in statutory damages, and the denial of punitive damages for the unauthorized disclosure of income tax return information. We affirm because we conclude that only one act of disclosure occurred. We also hold that under § 7431 punitive damages are precluded absent proof of actual damages.

I

On June 26, 1997, agents of the Internal Revenue Service (“IRS”) conducted a search for evidence at the residences of Zariq Siddiqui and Joseph Vullo, and the corporate offices of VSA. VSA operated a business called “Bagel Nosh.” The criminal investigation of Appellants continued for more than four years.

On October 24, 1998, approximately one hundred people attended IRS Special Agent Greg Heck’s retirement party at a restaurant in Tempe, Arizona. The guests included active and retired IRS employees, federal prosecutors, agents from other law enforcement agencies, and private tax attorneys, including two lawyers who were representing Appellants in the…