290

WHISTLEBLOWER 21276–13W, PETITIONER v. COMMISSIONER

OF INTERNAL REVENUE, RESPONDENT

WHISTLEBLOWER 21277–13W, PETITIONER v. COMMISSIONER

OF INTERNAL REVENUE, RESPONDENT

Docket Nos. 21276–13W, 21277–13W. Filed June 2, 2015. 

P–H was arrested for participating in a conspiracy to 

launder money. To minimize his punishment, P–H informed 

Government agents, including Internal Revenue Service (IRS) 

agents, that a foreign business (Targeted Business) assisted 

U.S. taxpayers in evading Federal income tax. P–H told the 

Government agents that the Targeted Business had no presence in the United States and instructed its personnel to stay 

out of the United States. Although he did not have documentation sufficient to inculpate the Targeted Business, P–H 

was aware of an individual who did. Because the individual 

(X) was outside the United States, P–H and P–W designed a 

plan to induce him to come to the United States. In executing 

the plan, P–W met with X and persuaded him to enter the 

United States. Upon entering the United States, X was 

arrested. While in custody, X agreed to assist the United 

States in its pursuit of the Targeted Business. After his 

release, X tried to back out of his agreement. But after 

meeting with P–H, X agreed to follow through on his commitment. In part because of X’s assistance, the Targeted Business 

was indicted, pleaded guilty, and paid the United States 

approximately $74 million. Ps filed separate Forms 211, 

Application for Award for Original Information, with the IRS 

Whistleblower Office, seeking awards under I.R.C. sec. 

7623(b). The forms were filed after the Targeted Business 

pleaded guilty and paid the United States $74 million. Upon 

receipt, the IRS sent Ps’ Forms 211 to its Ogden, Utah, 

Service Center, where a classifier noted that the forms were 

filed after the United States collected proceeds from the Targeted Business. On that basis, the Whistleblower Office 

rejected Ps’ award applications and sent Ps separate award 

determination letters stating that no proceeds had been collected using the information Ps submitted. The IRS asserts 

that the Tax Relief and Health Care Act of 2006, Pub. L. No. 
(290) WHISTLEBLOWER 21276–13W v. COMMISSIONER 291

1The names of petitioners’ counsel have been omitted in furtherance of 

protecting petitioners’ identities. 2 Unless otherwise indicated, all section references are to the Internal 

Revenue Code as amended. 

109–432, div. A, sec. 406(b), 120 Stat. at 2959 (TRHCA sec. 

406(b)), provides the Whistleblower Office with exclusive 

discretion to either investigate the taxpayer or refer the 

information provided by the whistleblower to an IRS operating division. The IRS further asserts that under TRHCA 

sec. 406(b) a whistleblower is ineligible for an I.R.C. sec. 

7623(b) award if he/she provides the information to an operating division of the IRS before submitting the information, 

via a Form 211, to the Whistleblower Office. Held: TRHCA 

sec. 406(b) does not endow the Whistleblower Office with 

exclusive authority to investigate the individual or entity that 

is the subject of an application for an award. The fact that Ps 

supplied their information to other Federal agencies, 

including an IRS operating division, before submitting the 

information to the Whistleblower Office on Form 211 does not, 

as a matter of law, render Ps ineligible for an award under 

I.R.C. sec. 7623(b). 

Sealed, 1 for petitioners. 

Richard L. Hatfield, John T. Arthur, and Jonathan D. 

Tepper, for respondent. 

OPINION 

JACOBS, Judge: In these consolidated cases petitioners, 

husband and wife, seek whistleblower awards authorized by 

section 7623(b), 2 asserting each brought to the Secretary’s 

attention information which resulted in the collection of 

unpaid Federal income tax. Petitioners each filed a Form 

211, Application for Award for Original Information, with the 

Internal Revenue Service (IRS) Whistleblower Office 

(Whistleblower Office) when they learned of the whistleblower award program from one of the Government agents to 

whom they provided information. The Whistleblower Office 

summarily rejected each petitioner’s claim on the basis that 

‘‘additional tax, penalties, interest or other proceeds’’ had 

been collected before each petitioner filed his/her Form 211. 

On the basis of its determination that petitioners’ claims 

were untimely, the Whistleblower Officer did not review, 

investigate, or evaluate the merits of petitioners’ claims. 
292 144 UNITED STATES TAX COURT REPORTS (290) 

The documents in petitioners’ administrative files were 

insufficient for the Court to conduct an effective review of 

this matter. The only documents in each petitioner’s administrative file were (1) the Form 211, (2) an acknowledgment of 

the receipt of the Form 211 assigning a claim number to the 

respective petitioner, (3) a letter informing the respective 

petitioner that his/her claim was still under consideration, (4) 

a Form 211 Classification Checksheet, and (5) a denial letter 

stating that the information provided did not result in the 

collection of proceeds. 

The Court held a partial trial at a special session on 

November 13, 2014, in Washington, D.C., in order to enable 

the Court to determine (1) what information, disclosure, and/ 

or action, if any, petitioners provided to employees, agents, 

and/or officers of the United States in detecting underpayments of tax and/or detecting and bringing to trial and 

punishment persons guilty of violating the internal revenue 

laws or conniving at the same and (2) whether that information, disclosure, and/or action satisfies the requirements of 

section 7623(b). Undisputed facts were revealed at the partial trial and are set forth infra. 

Background 

I. Petitioner Husband 

Petitioner husband assisted individuals who were engaged 

in illegal activities. In 2009 he was arrested at his Florida 

home, having been indicted as a coconspirator in a conspiracy to launder funds from the sale of pirated musical 

compact discs. He was taken to a local detention facility. To 

minimize his punishment, he agreed to cooperate with FBI, 

IRS, and other Government agents by providing them with 

information regarding the structure of various entities his 

clients used in their illegal activities. After spending four 

weeks in the local detention facility, he was transferred to 

another facility in Philadelphia, Pennsylvania. In January 

2010, petitioner husband pleaded guilty and entered into an 

agreement with the Department of Justice to provide truthful, complete, and accurate information and testimony. The 

agreement stated that ‘‘[t]he defendant understands that if 

he testifies untruthfully in any material way he can be pros-
(290) WHISTLEBLOWER 21276–13W v. COMMISSIONER 293

ecuted for perjury’’ with respect to both his criminal activities and ‘‘any other crimes about which he has knowledge.’’ 

II. The Targeted Business 

While in detention in Philadelphia, petitioner husband 

informed the Government agents that a foreign business 

(Targeted Business) assisted U.S. taxpayers in evading Federal income tax. Through his acquaintance with several of 

the officers of the Targeted Business, petitioner husband 

became aware that the Targeted Business was organized like 

a general partnership, with no liability protection for its 

owners. Petitioner husband believed that were the United 

States to bring criminal charges against the Targeted Business, its partners would settle in order to avoid the loss of 

business to the Targeted Business, as well as to avoid personal liability. Petitioner husband told the Government 

agents that to avoid potential U.S. prosecution the Targeted 

Business conducted no operations within the United States 

and instructed its partners, officers, and employees not to 

come to the United States. 

Petitioner husband did not have documentation sufficient 

to inculpate the Targeted Business, but he was aware of a 

senior officer of the Targeted Business (X) who did. Petitioner husband believed he could devise a plan to lure X to 

the United States, and he did. 

III. X 

Petitioner husband had met X when X was an employee of 

another entity. X had referred several individuals to petitioner husband for business advice. Eight of the individuals 

referred to petitioner husband were U.S. taxpayers. X 

demanded a kickback, ranging from $1,500 to $2,500 per 

client referral. Petitioner husband resented paying kickbacks 

to X , but he did so because the amounts he received from 

the referred clients were substantial. 

Petitioner husband believed X would disregard the Targeted Business’ admonition not to come to the United States 

if given sufficient financial motivation. Petitioner husband 

further believed that if X came to the United States, Federal 

law enforcement agents could arrest him, and to ‘‘save his 
294 144 UNITED STATES TAX COURT REPORTS (290) 

own skin’’ X would provide information which could be used 

to indict the Targeted Business. 

We were very close, I knew that he is—even that he’s a super sports guy 

and * * * [triathlete]—whatever, he’s a weak person. Like, he is not a 

strong person. He will fold and give up and work with the U.S. government. That’s one thing I knew about him. And the other thing I knew 

about him, that he was very greedy and he was open to kickbacks, obviously, what we introduced here, and that he was very vulnerable to 

malice. So, when we throw the bone, he will bite the bone. And when 

we have him, he will, excuse my English, spill his guts. 

IV. The Plan 

In 2010 petitioners met with U.S. Government agents 

(including FBI, ICE, and IRS agents), as well as British 

agents from the Metropolitan Police Service (Met), to formulate a plan to entice X to enter the United States. The plan 

was based on a transaction petitioners had used for one of 

petitioner husband’s clients and with which X was familiar. 

X would be told that one of petitioner husband’s clients had 

embezzled funds which were used to purchase an aircraft. As 

a reward for arranging financing to purchase the plane, petitioner husband ‘‘received’’ $1.2 million. X would be told that 

petitioners held the $1.2 million in a Bahamian bank account 

to avoid payment of U.S. tax and that they wanted to move 

the money into a new bank account which would be held in 

the name of an ‘‘old boarding school friend’’ of petitioner husband (beneficial owner). The beneficial owner to be introduced to X would, in reality, be a Met agent. X would be told 

that petitioners wanted him to assist them in transferring 

the money, and in exchange for that assistance, X would 

receive $40,000. 

V. The Sting 

Petitioner husband was involved in the drafting of all 

paperwork required to make it appear that an aircraft had 

been purchased with financed money. He then contacted X, 

and told him petitioners were in a dire situation and that it 

was imperative for them to meet. X was told to meet petitioner wife in England because petitioner husband could not 

travel internationally after his arrest. X knew, but apparently was not concerned, about petitioner husband’s arrest. X 

had met petitioner wife previously, and he trusted her. 
(290) WHISTLEBLOWER 21276–13W v. COMMISSIONER 295

In February 2010 petitioner wife flew to England to meet 

X. Agreeing to meet X was difficult for petitioner wife, especially because her husband’s arrest had taken its toll on their 

marriage. 

I was about 20 pounds less. I was scared. I was nervous. * * * It was 

obviously very important that I do a good job. So, I had to fly by myself. 

Agents didn’t fly with me, so I went to * * *. Obviously, I was in very 

bad shape, because I had to deal with * * * [petitioner husband’s arrest] 

situation. 

Petitioner wife arrived in England the day before her 

scheduled meeting with X. She met with Federal agents who, 

after checking her hotel room for ‘‘bugs’’, discussed her 

upcoming meeting with X. After speaking with the agents, 

she walked with them to the meeting place, a popular hotel 

lounge. Petitioner wife was informed that approximately 10 

American and British agents would be in the lounge during 

the meeting. Petitioner wife and the agents next went to the 

U.S. Embassy, where she was instructed to leave the lounge 

if she believed something was amiss. Petitioner wife spent 

the remainder of the day rehearsing what she would say to 

X. Specifically, she needed to explain how the plan would 

work, state that the $1.2 million came from embezzled money 

and that petitioners had not paid tax on that money, tell X 

about the beneficial owner, and make arrangements for X to 

meet the beneficial owner at another meeting. 

On the morning of the meeting, the Federal agents 

attached a recording device to petitioner wife and placed a 

backup recorder in her purse. Petitioner wife then went to 

the lounge and waited for X to arrive. When X arrived 10 to 

15 minutes later, he and petitioner wife conversed in a foreign language. Over the course of an hour, petitioner wife 

was able to complete her talking points and record the 

incriminating conversation. After the meeting, petitioner wife 

flew to Philadelphia and spent several days reviewing the 

English translation of the transcript of her conversation with 

X to ensure accuracy. 

For several weeks no one heard from X. The Government 

agents began to be concerned that, as petitioner husband put 

it, X ‘‘got totally cold feet.’’ By this point, the Government 

agents had come to trust petitioner husband. Petitioner husband’s passport was returned to him, and he flew, alone, to 
296 144 UNITED STATES TAX COURT REPORTS (290) 

the Cayman Islands to meet X in order to ‘‘rein him back in’’. 

Petitioner husband and X met, and X agreed to meet the 

beneficial owner. 

Petitioner wife again traveled to England to meet X. She 

followed the same procedure as in the first meeting. The 

same two types of recording devices were planted on her, and 

she met X at the same lounge as in the first meeting. 

Petitioner wife entered contact information with respect to 

the beneficial owner in her cellular telephone before her 

second meeting with X because 

the plan was that I arrive a little early, have a little warmup talk with 

* * * [X], and then I would get a phone call from * * * [the beneficial 

owner] and I would say ‘‘Oh, he’s coming,’’ and even show it in the phone 

and, you know, make it very real. 

When the would-be beneficial owner arrived, he and X had 

an immediate rapport. The beneficial owner’s backstory had 

been designed to appeal to X’s interests. Importantly, both 

the beneficial owner and X were triathletes. X mentioned 

that a triathlon in the Bahamas was upcoming and that he 

and the beneficial owner should compete together. They ultimately discussed the movement of the $1.2 million to a new 

bank account, the fact that the $1.2 million came from 

embezzled money, and that petitioners had not paid tax on 

it. 

Unfortunately, neither the recording device worn by petitioner wife nor the one in her purse worked; therefore, the 

incriminating conversation with X was not recorded. Consequently, over a period of two months, petitioner husband 

called X in an effort to get him to make incriminating statements. Eventually, petitioner husband got two recordings in 

which X discussed the fact that the $1.2 million came from 

embezzled money, that petitioners had not paid tax on it, 

and that X would assist in the movement of the $1.2 million 

to a new bank account. Petitioner husband was concerned 

that X would realize something was amiss, given the efforts 

made to convince him to say certain things (i.e., ‘‘embezzlement’’ and ‘‘untaxed’’), but petitioner husband’s fears proved 

unfounded. 

The next step was to draw X to the United States. Since 

X had been instructed by the Targeted Business to avoid 

entering the United States, a certain amount of enticement 
(290) WHISTLEBLOWER 21276–13W v. COMMISSIONER 297

was necessary. Petitioner husband contacted X and convinced 

him to fly to Florida to meet the beneficial owner before traveling to the triathlon in the Bahamas. He told X that the 

beneficial owner would give him $15,000 in cash as a downpayment when they met. X agreed to fly to Florida where he 

was arrested. 

After a week in custody, X agreed to assist the Government agents in their pursuit of the Targeted Business. X’s 

arrest was kept quiet so as not to alert the Targeted Business; eventually he was released and permitted to return 

abroad. Upon his return, X informed one of the Targeted 

Business’ owners that he had been arrested in the United 

States and that he needed help. When the Government 

agents learned of X’s betrayal, they directed petitioner husband to convince X to follow through on his commitment. 

Petitioner husband persuaded X to meet him. Petitioner 

husband appealed to X’s avariciousness by telling him that 

their meeting was necessary to resolve a number of issues 

with clients that affected payments to be made to X. Their 

meeting was tense. Petitioner husband bluntly laid out X’s 

situation. He told X that if he did not cooperate with U.S. 

authorities, he would be unable to travel internationally for 

the rest of his life, because ‘‘as soon as you jump over the 

water, they get you.’’ Petitioner husband used himself as an 

example of the benefits of cooperation. He explained that the 

Government agents kept their word, and he warned X that 

‘‘[i]f you screw them, you’re screwed’’. Ultimately X agreed to 

cooperate with the Federal authorities. 

After X began cooperating with the Government agents, a 

U.S. attorney’s office opened a criminal investigation of the 

Targeted Business. Often when X provided prosecutors with 

information, petitioner husband would be asked to confirm 

its accuracy. During this time petitioner husband met the 

assistant U.S. attorney leading the case, along with FBI and 

IRS agents, to discuss the organization and operation of the 

Targeted Business. 

The Targeted Business was indicted, with a subsequent 

superseding indictment, for conspiring with U.S. taxpayers 

and others to hide more than $1.2 billion in secret accounts, 

and the income generated therefrom, from the IRS. The Targeted Business pleaded guilty, as petitioner husband pre-
298 144 UNITED STATES TAX COURT REPORTS (290) 

dicted. As part of its guilty plea, the Targeted Business paid 

the United States approximately $74 million. 

Petitioner husband received an email from the lead FBI 

agent stating ‘‘GREAT JOB’’ with a copy of the indictment 

attached. Another agent called petitioners to congratulate 

them. In an attachment to the stipulation of facts filed with 

this Court, both the lead FBI agent and the assistant U.S. 

attorney leading the case against the Targeted Business were 

effusive in their praise of both petitioners, stating: 

The assistance and support of * * * [petitioners] in supporting the 

investigation was exceptionally helpful * * * In short, but for the work, 

information, and effort of * * * [petitioners] in assisting the federal 

government, the government’s successful action against * * * [the Targeted Business], as it was carried out, would not have been possible. 

* * * The information provided by the whistleblower [sic] was essential 

and substantially contributed to the government’s actions against * * * 

[the Targeted Business] that led to the collection of $74,131,694.42. 

The IRS was involved in the pursuit of the Targeted Business from the beginning of the investigation. At the partial 

trial before this Court, the IRS special agent involved in the 

investigation of the Targeted Business testified that petitioner husband’s cooperation had been essential and the 

agent acknowledged that there was no ‘‘Plan B’’ for the IRS 

to pursue the Targeted Business. 

VI. Petitioners’ Claims for Award 

Petitioners were unaware of any whistleblower award program when they began to assist the Government in its pursuit of the Targeted Business. During one of petitioner husband’s meetings with FBI, ICE, and IRS agents, one of the 

agents mentioned that the IRS had a whistleblower award 

program. Petitioner husband’s attorney contacted several of 

the agents involved, inquiring whether they would object to 

petitioners’ filing claims for award. No one objected to the 

filing of such claims. 

On or about April 16, 2013, petitioners each submitted a 

Form 211 to the Whistleblower Office. The Whistleblower 

Office mailed petitioners separate letters on May 7, 2013, 

notifying them that their Forms 211 had been received and 

were assigned claim numbers. On or about June 17, 2013, 

the Whistleblower Office sent petitioners separate letters 
(290) WHISTLEBLOWER 21276–13W v. COMMISSIONER 299

stating that their claims remained open and were under 

active consideration. 

Upon receipt, petitioners’ Forms 211 were sent to the IRS 

Service Center in Ogden, Utah, for processing. Upon arrival, 

a Form 211 is reviewed by a clerk who verifies the taxpayer’s 

name and the whistleblower’s name, address, and Social 

Security number and confirms that it includes an original 

signature. The form is then entered into the system and forwarded to a ‘‘classifier’’ to analyze the whistleblower’s allegations and determine whether the application should be 

accepted for substantive review by an operating division of 

the IRS or rejected summarily. In the instant matter, the 

classifier noted that proceeds had been collected from the 

Targeted Business before petitioners filed their respective 

Forms 211. On that basis, the classifier rejected petitioners’ 

applications. The classifier sent a Form 211 Classification 

Checksheet for each petitioner’s claim to Cindy Wilde, a team 

manager in the IRS Ogden Service center. The checksheet 

includes a number of unexplained coded categories. The 

checksheet stated: ‘‘Foreign [entity]—no US tax returns 

filed—claim is based on information previously provided to 

US Justice Dept which resulted in settlement agreement in 

US District court case–claim was filed after the settlement 

was reached and is therefore ineligible for reward’’. The 

checksheet then stated ‘‘Results from Classification: L–1010’’, 

which was the code instructing the IRS to send rejection letters to petitioners. The checksheet did not explain the 

rationale for the conclusion stated. 

Upon receipt of the Form 211 Classification Checklist, Ms. 

Wilde noted the L–1010 designation and directed a clerk to 

generate award determination letters denying petitioners’ 

claims. She did not review any other portion of the checklist. 

Identical letters to petitioners stated: 

We have considered your application for an award dated 04/10/2013. 

Under Internal Revenue Code Section 7623, an award may be paid only 

if the information provided results in the collection of additional tax, 

penalties, interest or other proceeds. In this case, the information you 

provided did not result in the collection of any proceeds. Therefore, you 

are not eligible for an award. 

Although the information you submitted did not qualify for an award, 

thank you for your interests in the administration of the internal revenue laws. 
300 144 UNITED STATES TAX COURT REPORTS (290) 

3Generally a Form 11369, Confidential Evaluation Report on Claim for 

Award, is included in the administrative file. The form is prepared for the 

Whistleblower Office by the IRS operating division that reviews the application and allows the Whistleblower Office to evaluate the merits of the 

claim before making a final determination. Because petitioners’ applications were rejected on the grounds that the Forms 211 were filed late, no 

such review was made, no Form 11369 was generated, and no Whistleblower Office analyst reviewed the claim. 

If you have any further questions in regards to this letter, please feel 

free to contact the Informant Claims Examination Team at 801–620– 

2169. 

The letters did not address the facts and circumstances of 

petitioners’ applications or mention the perceived timing 

issue. Indeed, apart from the date, each letter consisted of 

boilerplate language taken from an example letter in the 

Internal Revenue Manual. No further action was taken by 

the Whistleblower Office. 3

On or about August 13, 2013, the IRS sent petitioners the 

separate award determination letters denying their respective claims for award. Petitioners appealed those determinations to this Court, pursuant to section 7623(b)(4), on September 12, 2013. 

Discussion 

I. Introduction 

The only issue we decide herein is whether petitioners 

were required as a matter of law to file Forms 211 with the 

Whistleblower Office before providing information to the IRS 

to qualify for an award under section 7623(b). We hold they 

were not. 

II. Rejection of Petitioners’ Requests for Award as Untimely 

A. Respondent’s Argument 

Petitioners filed their respective Forms 211 three months 

after the Targeted Business pleaded guilty. According to 

respondent, information petitioners gave to the IRS special 

agent before filing their Forms 211 is not ‘‘information 

brought to the Secretary’s attention’’ (whistleblower information) for which petitioners can receive awards under section 

7623(b). Respondent concedes that section 7623(b) does not 

specifically include a timing requirement regarding when 
(290) WHISTLEBLOWER 21276–13W v. COMMISSIONER 301

whistleblower information must be submitted to the Whistleblower Office. But citing the Tax Relief and Health Care Act 

of 2006, Pub. L. No. 109–432, div. A, sec. 406(b), 120 Stat. 

at 2959 (TRHCA sec. 406), which established the Whistleblower Office, respondent argues that the Whistleblower 

Office is the ‘‘gatekeeper of information for purposes of nondiscretionary awards under amended section 7623(b).’’ And 

respondent asserts that to be eligible for an award under section 7623(b), an individual must submit the whistleblower 

information to the Whistleblower Office on Form 211 before 

any IRS action or examination is carried out with respect to 

that information. 

B. Whistleblower Statute Background 

Before its amendment in 2006, section 7623 authorized the 

Secretary to pay ‘‘such sums as he deems necessary for—(1) 

detecting underpayments of tax, and (2) detecting and 

bringing to trial and punishment persons guilty of violating 

the internal revenue laws or conniving at the same’’. The 

regulations promulgated thereunder provided that IRS district and/or service center directors have authority to approve 

awards ‘‘in a suitable amount, for information that leads to 

the detection of underpayments of tax, or the detection and 

bringing to trial and punishment of persons guilty of violating the internal revenue laws or conniving at the same.’’ 

Sec. 301.7623–1(a), Proced. & Admin. Regs. The regulations 

further provided that the ‘‘amount of a reward will represent 

what the district or service center director deems to be adequate compensation in the particular case.’’ Id. para. (c); see 

Michelle M. Kwon, ‘‘Whistling Dixie About the IRS Whistleblower Program Thanks to the IRC Confidentiality Restrictions’’, 29 Va. Tax Rev. 447, 452 (2010). 

In 2006 the Treasury Inspector General for Tax Administration (TIGTA) reviewed the whistleblower award program 

and filed a report entitled ‘‘Treasury Inspector General for 

Tax Administration Report 2006–30–092, The Informants’ 

Reward Program Needs More Centralized Management 

Oversight (June 2006)’’ (TIGTA Report). The TIGTA Report 

found that the whistleblower award program had significantly contributed to the IRS’ enforcement efforts and that 

examinations based on informant information were often 

more effective and efficient than examinations initiated using 
302 144 UNITED STATES TAX COURT REPORTS (290) 

the IRS’ primary method for selecting returns for examination. TIGTA Report at 1–2. However, the TIGTA Report 

found that the whistleblower award program was weakened 

by lack of standardized procedures and managerial oversight. 

Specifically, the TIGTA Report stated there was no national 

database of informant claims (instead there were five 

regional databases, one for each of the five regional units), 

and 45% of the case files reviewed suffered basic control failures, such as missing copies of forms and missing records of 

letters sent to informants. The TIGTA Report further stated 

that TIGTA was unable to determine (1) the justification for 

the percentage amount awarded to the informants in 32% of 

the cases reviewed and (2) the rationale for the decision to 

reject the informant’s claim in 76% of the cases reviewed. 

The TIGTA Report found that the whistleblower award 

program was replete with lengthy delays, averaging 71⁄2

years for an award to be paid to an informant. Id. at 2. The 

TIGTA Report concluded that while part of this delay was a 

result of the statute’s requirement that rewards be paid only 

after the additional taxes, fines, and penalties had been collected, the IRS failed to monitor taxpayers’ accounts for payment activity for periods longer than a year. The TIGTA 

Report further concluded that award rejections took an 

inordinate amount of time, and TIGTA could not determine 

the reason for delays between the receipt of the whistleblower’s claim and review thereof. Id. at 8–9. 

The TIGTA Report made two primary recommendations: 

first, that the IRS centralize management of the whistleblower award program and standardize processing of award 

claims; and second, that a detailed nationwide database of 

informant claims be developed and implemented. Id. at 9. 

C. The 2006 Amendment and Section 7623(b) 

In 2006 Congress enacted TRHCA to strengthen the IRS 

whistleblower award program. TRHCA sec. 406(b), an 

uncodified provision, established the IRS Whistleblower 

Office to administer the whistleblower award program. 

TRHCA sec. 406(b) provides: 

(1) IN GENERAL.—Not later than the date which is 12 months after the 

date of the enactment of this Act, the Secretary of the Treasury shall 

issue guidance for the operation of a whistleblower program to be 
(290) WHISTLEBLOWER 21276–13W v. COMMISSIONER 303

administered in the Internal Revenue Service by an office to be known 

as the ‘‘Whistleblower Office’’ which— 

(A) shall at all times operate at the direction of the Commissioner of 

Internal Revenue and coordinate and consult with other divisions in the 

Internal Revenue Service as directed by the Commissioner of Internal 

Revenue, 

(B) shall analyze information received from any individual described 

in section 7623(b) of the Internal Revenue Code of 1986 and either investigate the matter itself or assign it to the appropriate Internal Revenue 

Service office, and 

(C) in its sole discretion, may ask for additional assistance from such 

individual or any legal representative of such individual. 

(2) REQUEST FOR ASSISTANCE.—The guidance issued under paragraph 

(1) shall specify that any assistance requested under paragraph (1)(C) 

shall be under the direction and control of the Whistleblower Office or 

the office assigned to investigate the matter under paragraph (1)(A). No 

individual or legal representative whose assistance is so requested may 

by reason of such request represent himself or herself as an employee 

of the Federal Government. 

D. Analysis 

Respondent argues the statutory provisions make clear 

that Congress intended the Whistleblower Office to serve as 

the gatekeeper of whistleblower information. According to 

respondent, the Whistleblower Office is able to maintain the 

discretion granted it by TRHCA sec. 406(b)(1)(B) to investigate the matter or assign it to an appropriate IRS office 

only if the whistleblower information is first provided to it. 

Similarly, respondent maintains that the discretion granted 

to the Whistleblower Office by TRHCA sec. 406(b)(1)(C) to 

ask for assistance from the whistleblower would be jeopardized if it did not first receive the information. Respondent 

posits that this interpretation is consistent with the conclusions of the TIGTA Report emphasizing the need for centralized management of the whistleblower award program. 

Respondent’s position does not survive close scrutiny. As 

the TIGTA Report noted, audits under the old whistleblower 

award program were effective; it was the process by which 

awards were issued that was problematic. TRHCA sec. 406 

addresses this problem. It is clear from the statute that the 

Whistleblower Office is charged with being the central office 

for investigating the legitimacy of a whistleblower’s award 

claim, not necessarily the underlying tax issue. To interpret 

TRHCA sec. 406(b)(1)(B) as respondent does would mean the 

Whistleblower Office is authorized to open an examination 
304 144 UNITED STATES TAX COURT REPORTS (290) 

relating to a taxpayer. But the Whistleblower Office has neither sufficient staff nor institutional expertise to investigate 

taxpayers. See Internal Revenue Manual pt. 1.1.26.1 and 

1.1.26.2 (June 8, 2010) (discussing the roles and mission of 

the Whistleblower Office). And were the Whistleblower Office 

to expand its staff and expertise sufficiently to conduct 

examinations relating to taxpayers brought to its attention 

by whistleblowers, such expansion would duplicate the 

resources already available in IRS operating divisions. 

Moreover, if the Whistleblower Office opened an examination relating to a taxpayer, such an examination would alert 

the taxpayer that an informant was involved and this would 

potentially subject the whistleblower to exposure and retaliation, directly contravening the IRS policy of protecting the 

identities of informants. And we are loath to interpret a 

statute in a manner that leads to an absurd result. See, e.g., 

United States v. Granderson, 511 U.S. 39, 47 n.5 (1994); In 

re Chapman, 166 U.S. 661, 667 (1897). 

IRS auditors do not shy away from directly contacting 

whistleblowers when in need of assistance. See, e.g., Whistleblower 10949–13W v. Commissioner, T.C. Memo. 2014–106, 

at *3. Tellingly, at the partial trial of these cases, the IRS 

agent testified that he would not suspend his investigation to 

permit whistleblowers to file forms with the Whistleblower 

Office. 

Despite respondent’s assertions, we are mindful that the 

Forms 211 which petitioners filed anticipate that a whistleblower may approach an operating division of the IRS before 

notifying the Whistleblower Office. See Form 211, line 8, 

which instructs the whistleblower to provide the ‘‘Name & 

Title of IRS employee to whom violation was reported’’, and 

line 9, which asks for the ‘‘Date violation reported’’. 

Form 211 was revised in March 2014. It was not, and 

never has been, altered to discourage whistleblowers from 

approaching an operating division of the IRS. To the contrary, revised Form 211 expands the detail about a whistleblower’s directly contacting investigating agencies before contacting the Whistleblower Office, including providing space 

for the whistleblower to report any information submitted to 

other Federal agencies as well as State authorities. See Form 

211, line 5, which instructs the whistleblower to provide the 

‘‘[n]ame and title and contact information of IRS employee to 
(290) WHISTLEBLOWER 21276–13W v. COMMISSIONER 305

whom violation was first reported, if known’’. See also line 6, 

which instructs the whistleblower to provide ‘‘[d]ate violation 

reported (in number 5), if applicable’’. And line 7 asks: ‘‘Did 

you submit this information to other Federal or State Agencies’’? And line 8, which states: ‘‘If yes in number 7, list the 

Agency Name and date submitted’’. If respondent’s position 

were correct, these lines would be superfluous; in fact, they 

would be misleading to an unwary whistleblower. 

Respondent also argues that the Whistleblower Office must 

first receive a whistleblower’s information in order to permit 

Form 11369 to be filled out. Respondent maintains: 

The Form 11369 is the key document used by the Whistleblower Office 

in making the determinations required by section 7623 and only is created on a contemporaneous basis when information is referred by the 

Whistleblower Office. Thus, allowing individuals to file an award claim 

based on information previously submitted to a different function of the 

IRS would circumvent the centralized oversight and management of the 

program that was mandated by congress when section 7623(b) was 

enacted and undermine the Whistleblower Office’s ability to make wellsupported determinations. 

In considering respondent’s argument, we have reviewed 

Form 11369. The form allows an IRS operating division to 

inform the Whistleblower Office of each issue raised by the 

whistleblower, the disposition of that issue (i.e., whether the 

issue was pursued), and the level of assistance the whistleblower provided. Upon examination of the form, we do not 

believe it must be completed contemporaneously with a taxpayer-related examination. There is no reason for the contact 

information provided by Form 211 lines 5 and 6, other than 

for it to be used by the Whistleblower Office to contact the 

IRS employee who received the whistleblower information. 

And there is no reason for the Whistleblower Office to contact the IRS employee except when evaluating the whistleblower’s claim. 

Finally, even if respondent’s contention that the Whistleblower Office is authorized by TRHCA sec. 406 to conduct 

examinations relating to taxpayers is correct, the statute 

does not mandate that a whistleblower first bring his/her 

information to the Whistleblower Office to be eligible for an 

award. TRHCA sec. 406(b)(B) provides only that the Whistleblower Office shall ‘‘analyze information received’’ and 

‘‘either investigate the matter itself or assign it to the appro-
306 144 UNITED STATES TAX COURT REPORTS (290) 

priate Internal Revenue Service office.’’ The statute makes no 

mention of the Whistleblower Office’s being the first IRS 

office to receive information, and, as a practical matter, 

nothing prevents the Whistleblower Office from pursuing the 

whistleblower’s information even after another IRS office 

receives it. 

III. Conclusion 

On November 5, 2014, respondent filed a motion in limine, 

requesting the Court to confine its review to the issue of 

timing. Respondent asserts that the Court should apply an 

abuse of discretion standard of review and, if the Court finds 

the Whistleblower Office improperly denied petitioners’ 

claims for award on the basis that the claims were untimely 

submitted, the cases should be remanded to the Whistleblower Office for further consideration. The parties did not 

fully explore the standard of review to be used in whistleblower cases. And because it is not necessary for us to 

address the standard of review in resolving the timing issue, 

we will not do so. Respondent’s motion in limine will be 

denied. 

Because it rejected petitioners’ claims as untimely, the 

Whistleblower Office did not conduct a review, investigation, 

or evaluation of the merits of petitioners’ claims for award. 

We believe the parties should have an opportunity to resolve 

these cases on the basis of our holding herein. We will 

require them to file a status report in accordance with an 

order to be issued. 

In the light of the foregoing, 

f 

An appropriate order will be issued.