T.C. Memo. 2021-116

UNITED STATES TAX COURT

SUZANNE JEAN MCCRORY, Petitioner v.

COMMISSIONER OF INTERNAL REVENUE, Respondent

Docket Nos. 11798-18W, 12956-18W. Filed October 4, 2021.

Suzanne Jean McCrory, pro se.

Alex Shlivko and Rachel L. Schiffman, for respondent.

MEMORANDUM OPINION

JONES, Judge: In these whistleblower cases,

1 petitioner seeks review 

pursuant to section 7623(b)(4) of the determinations by the Whistleblower Office

1

By order dated March 18, 2019, we consolidated docket nos. 11798-18W 

and 12956-18W for purposes of trial, briefing, and opinion.

Served 10/04/21
- 2 -

[*2] (WBO) of the Internal Revenue Service (IRS) to reject 19 claims for awards.2

 

Relying on a stipulated record, the parties submitted the cases for decision without 

trial under Rule 122. As explained below, we will sustain the WBO’s 

determinations because the WBO’s rejections of petitioner’s claims were supported 

by the administrative record and were not arbitrary, capricious, an abuse of 

discretion, or otherwise not in accordance with the law. Accordingly, we rule for 

respondent.

Background

I. Two Sets of Whistleblower Claims

Petitioner submitted six Forms 211, Application for Award for Original 

Information, dated April 5, 2018 (first set of WB claims). Petitioner alleged in her 

first set of WB claims that certain individuals (target taxpayers) may not have 

reported taxable income from settlements or jury awards. Respondent received 

these forms on or around April 13, 2018, and assigned a claim number to each of 

them.

3

2

All section references are to the Internal Revenue Code in effect at all 

relevant times, and all Rule references are to the Tax Court Rules of Practice and 

Procedure, unless otherwise indicated.

3

The corresponding claim numbers were: 2018-7663, 2018-7664, 2018-

7665, 2018-7668, 2018-7671, and 2018-7674.
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[*3] Petitioner then submitted thirteen additional Forms 211 most of which were 

dated April 22, 2018 (second set of WB claims). On these forms petitioner made 

the same allegations that she had made in the first set of WB claims but with 

respect to different target taxpayers. Respondent received the second set of WB

claims on or around May 4, 2018, and assigned a claim number to each of them.

4

Each set of claims was accompanied by a cover letter in which petitioner 

disclosed that her allegations were based on a “hypothesis” and supported by 

publicly available information. For each claim she attached certain publicly 

available information.

5

4

The corresponding claim numbers were: 2018-8507, 2018-8508, 2018-

8510, 2018-8511, 2018-8512, 2018-8513, 2018-8514, 2018-8517, 2018-8518, 

2018-8519, 2018-8520, 2018-8521, and 2018-8522.

5

Petitioner alleged in some of the claims that the target taxpayer owed more 

than $2 million. The corresponding Award Recommendation Memorandum 

(ARM) for each of these claims noted that they might meet the requirements for a 

sec. 7623(b) claim. 
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[*4] II. WBO’s Processing of the Claims

The WBO processed each set of claims. An employee in the WBO’s 

classification section (classifier) performed an initial evaluation of, and drafted an 

ARM for, each claim.

6

A. ARM Format and Completion

1. Classification Research

Each ARM contains a section captioned “Classification Research”, which 

lists command codes used for extracting information from various IRS databases 

and research programs.

7

 In addition to the command codes, the Classification 

Research section lists the names of three computerized systems which require IRS 

access and the electronic portal that allows employees to access certain IRS 

6

On the basis of the stipulated record, we can surmise that the individuals 

named on the ARMs in the sections labeled “Classification Section” and “Prepared 

by” were performing the functions of “classifiers”. See Internal Revenue Manual 

(IRM) pts. 25.2.1.3.1(1) (Jan. 11, 2018) (“The classifier will determine whether the 

information should be forwarded for further review.”).

7

Command codes are programmed for use in the IRS Integrated Data 

Retrieval System (IDRS), an electronic interface between the IRS’ employees and 

its various computer systems. See Plotkin v. Commissioner, T.C. Memo. 2019-27, 

at *13 n.3; IRM pt. 2.3.2.1 (Mar. 16, 2010). An IRS employee can obtain a 

transcript by entering various command codes into IDRS. Plotkin v. 

Commissioner, at *13 n.3 (citing May v. Commissioner, T.C. Memo. 2014-194, 

at *12 n.6, aff’d sub nom. Best v. Commissioner, 702 F. App’x 615 (9th Cir. 

2017)).
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[*5] resources.

8

 The codes, system names, and the portal name are listed 

individually with a box next to each. Also in the Classification Research section is 

a box labeled “Internet”. See Internal Revenue Manual pt. 25.2.1.3.2(4) (Jan. 11, 

2018). The ARM instructs the classifier to “Check applicable boxes that you 

researched.”

In each of the 19 ARMs, the classifier checked the boxes next to certain 

command codes, indicating that the classifier used those codes to retrieve 

information from IRS databases and systems. With respect to the first set of WB

claims and six of the second set of WB claims, the classifier checked the boxes 

next to the following seven command codes:

• INOLES: returns name lines (current and prior), street addresses, tax 

year, Social Security information, and other information specific to 

the type of account requested;

9

8

The three computerized systems are the Web-based Currency and Banking 

Retrieval System, Accurint, and YK1. The electronic portal is called the Employee 

User Portal (EUP). For a description of the Web-based Currency and Banking 

Retrieval System, see IRM pt. 4.26.4.1 (Jan. 6, 2016). For descriptions of Accurint 

and YK1, see IRM pt. 4.24.18.14.3.5 (Apr. 9, 2014). For a description of the EUP, 

see IRM pt. 3.21.263.9.1.2 (Dec. 8, 2017).

9

IRM pt. 2.3.47.3(2) (Jan. 1, 2018).
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• IRPTRL: requests either online or hard copy Information Returns 

Processing (IRP) transcripts showing data submitted by employers 

and other third parties, such as Form 1042-S, Foreign Person’s U.S. 

Source Income Subject to Withholding, Form W-2, Wage and Tax 

Statement, Form W-2G, Certain Gambling Winnings, Form 1099-

MISC, Miscellaneous Income, and Form 1099-R, Distributions From 

Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, 

Insurance Contracts, etc. Such data reports taxpayer income during 

the year from the Information Returns Master File;

10

• TRDBV: displays data from the Tax Return Database through which 

summary selection screens display the returns, schedules, and forms 

submitted by a specific filer;

11

• IMFOLI: returns a preview of an individual taxpayer’s compliance 

history for identifying any filed or unfiled returns;

12

10See IRM pt. 2.3.35.1(1) (Jan. 11, 2018), 2.3.35.9.5 (Dec. 4, 2014). The 

IRS IRP system receives data submitted by employers and other third parties 

reporting income of taxpayers during the year. See Frantz v. Commissioner, T.C. 

Memo. 2020-64, at *6 n.5 (citing Oman v. Commissioner, T.C. Memo. 2010-276, 

100 T.C.M. (CCH) 548, 551 (2010)).

11IRM pt. 2.3.73.2 (Apr. 27, 2018).

12IRM pt. 4.20.3.1.5(1) (Oct. 4, 2017).

[*6]
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• IMFOLT: provides a transcript of Form 1040, U.S. Individual 

Income Tax Return, for a particular tax period;

13

• BMFOLI: provides a preview of a business taxpayer’s compliance 

history for identifying any filed or unfiled returns;

14 and

• BMFOLT: provides a transcript of a Business Master File return such 

as a Form 5330, Return of Excise Taxes Related to Employee Benefit 

Plans, Form 990-T, Exempt Organization Business Income Tax 

Return, Form 1120, U.S. Corporation Income Tax Return, Form 1120-

S, U.S. Income Tax Return for an S Corporation, or Form 1065, U.S. 

Return of Partnership Income, for a specific tax period.

15

With respect to the remaining seven claims in the second set of WB claims, 

the classifier checked the boxes next to the command codes INOLES, IRPTRL, 

TRDBV, IMFOLI, and IMFOLT. The classifier did not check the boxes next to 

the BMFOLI or BMFOLT codes but did check the boxes next to the following 

codes:

13IRM pt. 4.71.2.3(1) (Nov. 9, 2017), 4.71.2.2.1(1)(c.) (Nov. 9, 2017) 

(IMFOLT is an acronym for Individual Master File On-Line).

14IRM pt. 4.20.3.1.5(1).

15IRM pt. 4.71.2.3(1), 4.71.2.2.1(1)(a.) (BMFOLT is an acronym for 

Business Master File On-Line).

[*7]
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• AMDISA: provides a listing of all taxable returns under 

examination;

16

• IMFOLZ: displays the audit history of an entity;

17 and

• RTVUE: returns a summary selection screen that displays the 

returns, schedules, and forms submitted by a specific filer.

18

The box marked “Internet” is not checked on any of the ARMs.

2. Basis for the Recommendation

Underneath “Classification’s Recommendation” is a section captioned, 

“Basis for the Recommendation”. In each Basis for the Recommendation section, 

the classifier wrote a bulleted review of the claim. In each of the ARMs, the Basis 

for the Recommendation section is relatively similar. In the following discussion 

we will, therefore, describe the Basis for the Recommendation section in three 

representative ARMs.

In the Basis for the Recommendation section prepared for claim No. 2018-

007664--a claim in which petitioner alleged that the target taxpayer failed to report 

taxable income received from a settlement with the U.S. Government--the 

16IRM pt. 4.71.2.3(1).

17IRM pt. 2.3.51.9(17) (Jan. 1, 2018).

18IRM pt. 2.3.52.1.1(2) (Jan. 1, 2012).

[*8]
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[*9] classifier wrote in the bulleted review that the taxpayer had “no open issues or 

balances due” and received Form 1099-MISC, from “US DOJ” in 2017.

In claim No. 2018-007671, petitioner alleged that the target taxpayer failed 

to report taxable income received as the result of litigation with a former employer. 

The classifier wrote in the bulleted review that the target taxpayer filed Form 1040, 

received Form W-2 for backpay from the company in question, and reported 

taxable interest.

For claim No. 2018-008507--another claim in which petitioner alleged that 

the target taxpayer failed to report taxable income after a trial and settlement with a 

former employer--the classifier wrote in the bulleted review that the target 

taxpayer’s total reported income included all settlement payments and indicated 

that this information was retrieved using command code “RTVU[e]”.

At the bottom of some of the bulleted reviews the classifier wrote that the 

claim, “fail[ed] to include specific and credible information to support a potential 

tax violation/allegation, as well as documentation to support the claim.” At the 

bottom of others the classifier indicated that the claim was “speculative”, “purely 

speculative”, or both. None of the ARMs refer to the fact that petitioner’s 

allegations were based on publicly available information.
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[*10] 3. Classification’s Recommendation

Underneath Classification Research is a section captioned Classification’s 

Recommendation. In each ARM the classifier wrote in this section, “Reject the 

claim: Allegations are not specific, credible, or are speculative”.

B. Summary

As illustrated by the foregoing, all 19 ARMs reflect that a classifier 

reviewed petitioner’s allegations, compared them with relevant IRS records, and 

recommended rejection of petitioner’s claims because “[a]llegations are not 

specific, credible, or are speculative”.

III. The WBO’s Final Determination Letters

On May 17, 2018, the WBO issued petitioner six final determination letters 

for the first set of WB claims. Between June 12 and 13, 2018, the WBO issued 

petitioner thirteen final determination letters for the second set of WB claims.

19 

Each final determination letter was captioned “FINAL DECISION UNDER 

SECTION 7623(a)” and informed petitioner that “[t]he Whistleblower Office has 

made a final decision to reject your claim for an award.” Each letter explained: 

“The claim has been rejected because the information provided was speculative 

19The WBO did not issue preliminary rejection letters to petitioner for any of 

the claims.
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[*11] and/or did not provide specific or credible information regarding tax 

underpayments or violations of internal revenue laws.”20

While residing in New York, petitioner timely petitioned this Court to 

review the WBO’s determinations on June 14 and July 2, 2018. On March 28, 

2019, the parties submitted a joint motion to submit the cases without trial under 

Rule 122, which the Court granted. The parties stipulated the administrative 

record in each case.

Discussion

I. Whistleblower Awards

A. Awards Under Section 7623

An individual may be entitled to an award under section 7623(a) for 

providing the IRS with information leading to the detection of underpayments of 

tax or the detection and bringing to trial and punishment persons guilty of violating 

the internal revenue laws. Section 7623(b) makes whistleblower awards 

mandatory if certain requirements are met. See Van Bemmelen v. Commissioner, 

20We note that each letter included the same “and/or” conjunction that led to 

a lack of clarity in Lacey v. Commissioner, 153 T.C. 146, 170 (2019). As 

discussed infra, there is no lack of clarity here. But we continue to be generally 

concerned that this form text may create confusion when we review a summary 

rejection of a whistleblower claim. See Alber v. Commissioner, T.C. Memo. 

2020-20, at *8 n.5.
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[*12] 155 T.C. 64, 71 (2020). A whistleblower award under section 7623(b)(1) 

requires that the IRS initiate an administrative or judicial action and collect tax 

proceeds. See Cohen v. Commissioner, 139 T.C. 299, 302 (2012), aff’d per 

curiam, 550 F. App’x 10 (D.C. Cir. 2014); Cooper v. Commissioner, 136 T.C. 597, 

600 (2011).

B. Tax Court Jurisdiction

We have jurisdiction over any determination made by the Secretary 

regarding an award under section 7623(b)(1), (2), or (3), including rejections and 

denials of claims for awards. See sec. 7623(b)(4); Lacey v. Commissioner, 153 

T.C. 146, 163-164, 169 (2019). Although we have jurisdiction to review such 

determinations, we do not have authority to order the IRS to commence an 

administrative or judicial proceeding, or to review the IRS’ determination of the 

alleged tax liability to which a whistleblower’s claim pertains. See Lacey v. 

Commissioner, 153 T.C. at 164; Cohen v. Commissioner, 139 T.C. at 302 (citing 

Cooper v. Commissioner, 136 T.C. at 600).

C. Standard and Scope of Review

When we review the WBO’s determination regarding whether a 

whistleblower is entitled to an award, we generally confine ourselves to the 

administrative record to decide whether there has been an abuse of discretion. 
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[*13] Van Bemmelen v. Commissioner, 155 T.C. at 78; see also Kasper v. 

Commissioner, 150 T.C. 8, 22 (2018). In such cases (and the instant cases are no 

exception), “we review final agency action under the Administrative Procedure 

Act, 5 U.S.C. secs. 551-559, 701-706 (2018), * * * deciding, as a matter of law, 

whether the agency action is supported by the administrative record and is not 

arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with 

the law.” Rogers v. Commissioner, 157 T.C. __, __ (slip op. at 11) (Aug. 2, 2021) 

(citing Van Bemmelen v. Commissioner, 155 T.C. at 79).

D. WBO Evaluation

Pursuant to section 7623 and the regulations thereunder, the WBO performs 

an initial evaluation of a whistleblower’s submission to determine whether the 

claim, on its face, meets minimum standards. See Van Bemmelen v. 

Commissioner, 155 T.C. at 81-83; Lacey v. Commissioner, 153 T.C. at 159-160; 

Worthington v. Commissioner, T.C. Memo. 2020-141; sec. 301.7623-1(c)(1), (4), 

Proced. & Admin. Regs.

21 As relevant here, a rejection occurs when the 

21See also Tax Relief and Health Care Act of 2006, Pub. L. No. 109-432, 

sec. 406(b)(1)(B), 120 Stat. at 2960 (requiring the WBO to “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”).
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[*14] whistleblower’s submission is insufficient on its face because it fails to meet 

certain threshold requirements. Sec. 301.7623-3(c)(7), Proced. & Admin. Regs.;

see also Lacey v. Commissioner, 153 T.C. at 168-169.

The threshold criteria by which the WBO evaluates a claim’s potential 

eligibility for an award include that the claim:

• “contain[s] specific * * * information”;

• “contain[s] * * * credible information”; 

• provides “information that the whistleblower believes will lead to 

collected [tax] proceeds”;

• reports “fail[ure] to comply with the internal revenue laws”;

• “identif[ies] the person(s) believed to have failed to comply with the 

internal revenue laws”;

• “provide[s] substantive information, including all available 

documentation”; and 

• does not “provide speculative information”.

Lacey v. Commissioner, 153 T.C. at 160 (quoting section 301.7623-1(c)(1) 

and (4), Proced. & Admin. Regs.). “It is the job of the WBO to initially evaluate a 

claim against those criteria. * * * If, in its initial evaluation, the WBO determines 

that a claim is deficient, then under the regulations it can ‘reject’ the claim 

outright”. Lacey v. Commissioner, 153 T.C. at 161. Of particular relevance in 

these cases, “[s]ubmissions that provide speculative information or that do not 
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[*15] provide specific and credible information regarding tax underpayments or 

violations of internal revenue laws do not provide a basis for an award” and may 

be rejected by the WBO. Sec. 301.7623-1(c)(1), Proced. & Admin. Regs.

II. Analysis

The administrative record demonstrates a common pattern in the WBO’s 

consideration of petitioner’s 19 claims. The WBO received, initially evaluated, 

and completed an ARM for every claim. On each ARM the classifier completed 

the Classification Research and Basis for the Recommendation sections. In each 

Classification Research section, the classifier checked the boxes next to multiple 

command codes, indicating that the classifier retrieved information from IRS 

databases and systems. Each Basis for the Recommendation section included a 

bulleted review reflecting that the classifier compared petitioner’s allegations with 

relevant information from the IRS’ databases and systems, including information 

about the target taxpayers. 

Finally, on each ARM, the classifier recommended rejection of the claim 

because, “[a]llegations are not specific, credible, or are speculative”. See id. 

Consequently, rather than forwarding the claim to an IRS examiner for possible 

action, the WBO rejected the claim, and stated in each final decision letter that 

“[t]he claim has been rejected because the information provided was speculative 
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[*16] and/or did not provide specific or credible information regarding tax 

underpayments or violations of internal revenue laws.” In reviewing the WBO’s 

rejections of these claims, we do not substitute our judgment for the reasonable 

judgment of the WBO but instead review only for abuse of discretion. See, e.g., 

Lacey v. Commissioner, 153 T.C. at 164. 

On the basis of the foregoing, we conclude that the WBO evaluated each 

claim and used reasonable judgment in determining that each one should be 

rejected because the information provided was speculative and/or because it did 

not provide specific or credible information regarding tax underpayments or 

violations of internal revenue laws. We therefore rule that the WBO’s rejections of 

petitioner’s claims were not arbitrary, capricious, an abuse of discretion, or 

otherwise not in accordance with the law. See Van Bemmelen v. Commissioner, 

155 T.C. at 79.

III. Petitioner’s Arguments

Petitioner assigns at least three errors to the WBO; she believes that each 

constitutes an abuse of discretion. First, petitioner contends that her claims were 

summarily dismissed by the WBO because she used publicly available 

information. Second, petitioner argues that her claims should have been “denied”, 

rather than “rejected”, in accordance with the relevant regulatory provisions. 
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[*17] Finally, petitioner contends that the WBO committed a procedural foul. She 

believes that certain claims should have been treated as claims arising under 

section 7623(b) (section 7623(b) claims) but were improperly classified as claims 

arising under section 7623(a) (section 7623(a) claims). We review these 

arguments in turn.

A. Publicly Available Information

On the basis of her reading of the administrative record, petitioner alleges 

that the WBO improperly concluded that her claims were speculative because they 

were supported by publicly available information. Petitioner assigns error by 

pointing to IRM provisions which:

• prohibit the WBO from rejecting a whistleblower claim solely 

because the whistleblower used publicly available information, see

IRM pt. 25.2.1.3.3(3) (Jan. 11, 2018);

• direct that “[c]laims submitted with publicly available information 

must still be considered, regardless of the whistleblower’s firsthand 

knowledge of the situation”, id.; and

• highlight a provision of the IRM that provides if allegations are based 

on or supported by information, including public information, then the 

claim is not purely speculative in nature, IRM pt. 25.2.1.3.2(5).
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[*18] With respect to petitioner’s reliance on the IRM, we observe that the IRM’s 

directives are instructive in understanding the procedures the IRS expects its 

employees to follow, but they do not carry the force and effect of law or confer 

rights on taxpayers. See Van Bemmelen v. Commissioner, 155 T.C. at 85 n.15; 

Eichler v. Commissioner, 143 T.C. 30, 39 (2014) (citing Fargo v. Commissioner, 

447 F.3d 706, 713 (9th Cir. 2006), aff’g T.C. Memo. 2004-13). Furthermore, 

compliance with IRM provisions is not mandatory.22 Reynolds v. Commissioner, 

T.C. Memo. 2021-10, at *26 (citing Urban v. Commissioner, 964 F.2d 888, 890 

(9th Cir. 1992), aff’g T.C. Memo. 1991-220, Ward v. Commissioner, 784 F.2d 

1424, 1430-1431 (9th Cir. 1986), aff’g T.C. Memo. 1984-570, and Wadleigh v. 

Commissioner, 134 T.C. 280, 294 n.13 (2010)).

Though it is true that all the ARMs state in the Classification’s 

Recommendation section that the claim is “speculative” and several repeat the 

same in the Basis for the Recommendation section, each ARM also includes the 

classifier’s bulleted review of the claim which reflects that the classifier compared 

22In the context of IRS collections, we have held that a settlement officer 

does not abuse his discretion if he follows the guidelines set forth in the IRM. See

Orum v. Commissioner, 123 T.C. 1, 13 (2004), aff’d, 412 F.3d 819 (7th Cir. 2005); 

Margolis-Sellers v. Commissioner, T.C. Memo. 2019-165, at *40; Aldridge v. 

Commissioner, T.C. Memo. 2009-276, 2009 WL 4282048, at *5.
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[*19] petitioner’s allegations to IRS records, including records of target taxpayers. 

None of the ARMs include any reference to the fact that petitioner’s claims were 

supported by publicly available information or connect that fact to the classifier’s 

recommendation.

In sum, the record does not support the conclusion that the WBO’s 

determinations were premised on the claims’ reliance on publicly available 

information.

23

B. Classification of Whistleblower Claims

Petitioner argues that the WBO abused its discretion by “rejecting”, rather 

than “denying”, her claims. The regulations establish a distinction between a 

“rejection” (a determination that relates solely to the whistleblower and the 

information on the face of the claim that pertains to the whistleblower), sec.

301.7623-3(c)(7), Proced. & Admin. Regs., and a “denial” (a determination that 

relates to or implicates taxpayer information, including cases in which the IRS 

23See McCrory v. Commissioner, T.C. Memo. 2018-12, at *9, which 

involved the same petitioner as in the instant case. There too she submitted 

whistleblower claims based on publicly available information. The Court granted 

the Commissioner’s motion for summary judgment, holding that the whistleblower 

did not meet threshold requirements for an award and that remand was not 

appropriate.
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[*20] does not proceed or collect proceeds on the basis of the whistleblower’s 

information), id. subpara. (8).

We have similarly recognized this distinction between a “rejection” and a 

“denial”. See Rogers v. Commissioner, 157 T.C. at __ (slip op. at 13-20); Lacey v. 

Commissioner, 153 T.C. at 161-163; Worthington v. Commissioner, at *21; Cline 

v. Commissioner, T.C. Memo. 2020-35, at *13-*14. If the WBO makes an 

ambiguous determination, the Court looks to the actions of the IRS as outlined in 

the administrative record to decide whether the determination was a rejection or a 

denial. See Rogers v. Commissioner, 157 T.C. at __ (slip op. at 28); Worthington 

v. Commissioner, at *24. In such a case, although the WBO must initially evaluate 

a claim for defects against the criteria outlined in section 301.7623-1(c)(1) and (4), 

Proced. & Admin. Regs., conducting research outside of IRS records tends toward 

characterizing the action as a denial.24 See Worthington v. Commissioner, at *24. 

In the instant cases, however, there was no ambiguity as to the nature of the 

WBO’s determinations: The WBO rejected petitioner’s claims on the basis of the

criteria outlined in section 301.7623-1(c)(1) and (4), Proced. & Admin. Regs. As 

24In Worthington v. Commissioner, T.C. Memo. 2020-141, at *22-*24, we 

considered that personnel in both the WBO and an operating division conducted 

research outside of IRS records.
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[*21] we have described, we are satisfied that these determinations reflected 

reasonable judgment on the part of the WBO and were not an abuse of discretion.

Petitioner assigns error to the WBO’s rejection of her claims because the 

administrative record shows that each classifier reviewed IRS records relating to 

the target taxpayers, apparently after inputting the command codes to retrieve 

relevant information from IRS databases or systems. Petitioner equates the 

classifier’s activity to a determination that relates to or implicates taxpayer 

information. See sec. 301.7623-3(c)(8), Proced. & Admin. Regs. Consequently, 

she appears to question whether the WBO’s subsequent action must be 

characterized as a denial. We do not think so.

The regulation petitioner cites says simply that a denial “relates to or 

implicates taxpayer information”. See id. It does not define “taxpayer 

information” and, more importantly, it does not mandate that a denial must follow 

any time a classifier looks at taxpayer information. By contrast, the regulations 

specifically permit the WBO to reject a whistleblower’s claim when it determines 

that the whistleblower’s information is speculative, not credible, or fails to satisfy 

one of the other enumerated criteria. See sec. 301.7623-1(c)(4), Proced. & Admin. 

Regs. That is what the WBO did here, on the basis of each classifier’s
- 22 -

[*22] recommendations. The fact that the classifier considered IRS records as part 

of the review process does not require a different result.

25

Our conclusion in this regard is consistent with our prior caselaw. In Cline 

v. Commissioner, at *18-*19, we ruled that the WBO did not abuse its discretion in 

rejecting the whistleblower’s claim after a review of the IRS’ internal records to 

inquire whether the target taxpayer included all forms of income on its tax return 

for the year in question. In Kansky v. Commissioner, T.C. Memo. 2020-43, at *3, 

the classifier researched the taxpayer’s allegations by retrieving and analyzing IRS 

account transcripts and tax returns filed by the target taxpayers. We identified no 

abuse of discretion in the WBO’s rejection of the whistleblower’s claims. Id.

at *8. Conversely, in Worthington v. Commissioner, at *24, where the WBO’s 

determination was ambiguous, we stated that research “outside the claim” 

conducted by both an IRS operating division and the WBO, “tends toward 

characterizing the subsequent action as a denial.”

Unlike in Worthington, there is no ambiguity in these cases that the WBO 

rejected petitioner’s claims. It may be that the record here could also have justified 

25Indeed, IRS guidance directs classifiers to use all available resources, 

including IDRS and other databases, to evaluate every whistleblower claim. See

IRM pt. 25.2.1.3.2(4) (Jan. 11, 2018).
- 23 -

[*23] a denial, but we are concerned with the determinations the WBO actually 

made, not with those it could have made. And, on the record before us, we are 

satisfied that the WBO’s determinations were consistent with the regulations.

C. Alleged Procedural Irregularities

Petitioner protests that the WBO classified certain claims as section 7623(a) 

claims rather than section 7623(b) claims.

26 Section 7623(b) makes whistleblower 

awards mandatory if certain requirements are met, one of which is that the amount 

of tax, penalties, interest, additions to tax, and additional amounts in dispute 

exceed $2 million. Sec. 7623(b)(5)(B). Because some of her claims alleged that 

the target taxpayer owed more than $2 million and the ARMs for those claims 

noted that the claims might meet the requirements for a section 7623(b) claim, 

petitioner assigns as error their ultimate classification as section 7623(a) claims. 

26For a rejection of a claim arising under sec. 7623(b), the WBO must issue a 

preliminary rejection letter, notifying the whistleblower of the claim’s defects and 

giving the whistleblower an opportunity to perfect it. See sec. 301.7623-3(c)(7), 

Proced. & Admin. Regs. Conversely, the regulations do not contain a similar 

mandate for a claim arising under sec. 7623(a). See sec. 301.7623-3(b)(3), Proced. 

& Admin. Regs. As petitioner’s claims were rejected under sec. 7623(a), the WBO 

did not issue preliminary rejection letters to petitioner. See Lacey v. 

Commissioner, 153 T.C. at 161 n.15; Frantz v. Commissioner, at *14 n.12.; sec. 

301.7623-1(c)(4), Proced. & Admin. Regs. (explaining that if the WBO rejects a 

claim, then the WBO will provide notice of the rejection to the whistleblower 

pursuant to the rules of sec. 301.7623-3(b)(3) or (c)(7), Proced. & Admin. Regs.).
- 24 -

[*24] Petitioner suggests that this purported inconsistency in the administrative 

record amounts to an abuse of discretion and asks us to “direct Respondent * * * 

[to] designate claims a[s] 7623(a) or 7623(b) matters as prescribed in the 

regulations.”

We have recognized that for purposes of classifying a claim as a section 

7623(a) claim or a section 7623(b) claim, the IRM provides that the

whistleblower’s description of the amount owed by the taxpayer is not 

determinative. Van Bemmelen v. Commissioner, 155 T.C. at 85. Even if the 

alleged amount exceeds $2 million, the claim is to be considered a section 7623(a) 

claim if “the claim does not identify a specific/credible tax issue or is purely 

speculative in nature.” Id. (quoting IRM pt. 25.2.2.7.1(2) (Jan. 12, 2018)).

In Van Bemmelen v. Commissioner, 155 T.C. at 85, the whistleblower 

argued that the record reflected inconsistencies in the classification of his claim as 

a section 7623(a) claim and such inconsistencies amounted to an abuse of 

discretion. We concluded that the WBO did not act arbitrarily by classifying a 

claim under section 7623(a) after the classifier, acting in accordance with IRS 

directives, concluded that the claim was “purely speculative”. See Van Bemmelen 

v. Commissioner, 155 T.C. at 85-86.
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[*25] With respect to claims in which petitioner alleged that the target taxpayers 

owed more than $2 million, the record establishes that the relevant classifier 

determined that such allegations were “not specific, credible, or * * * [were] 

speculative.” The classifier acted in accordance with IRM directives by 

characterizing the claim as arising under section 7623(a). See IRM pt. 

25.2.2.7.1(2). And, as in Van Bemmelen, any error in this regard was in any event 

harmless, because we have treated petitioner’s claims as arising under section 

7623(b) for purposes of our review. See Van Bemmelen v. Commissioner, 155 

T.C. at 86. Accordingly, we conclude that the classifier’s decisions were not 

arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with 

the law.

27

IV. Conclusion

While petitioner’s concerns about the accuracy of third-party income 

reporting may be sincere, the administrative record establishes that the WBO did 

not abuse its discretion with respect to her whistleblower claims. As we do not 

perceive any abuse of discretion in the WBO’s rejections of petitioner’s claims, we 

27As we conclude that the WBO did not abuse its discretion, we do not need 

to reach the issue of whether we have jurisdiction to grant petitioner the relief she 

seeks in this matter.
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[*26] rule for respondent. We have considered all of the arguments made by the 

parties and, to the extent they are not addressed herein, we find them to be moot, 

irrelevant, or without merit.

To reflect the foregoing,

Decisions will be entered for 

respondent.