T.C. M em o . 2 0 2 0 -1 3 7

UNITED STATES TAX COURT

G EORGE J EROM E STEVENSON, Pet i ti o n er v . COM M ISSIONER OF INTERNAL REVENUE, Res po n d en t

Do ck etNo . 7 4 7 1-1 9W
. Fi l edSep t em b er 3 0 , 2 0 2 0
.
Geo rg e J ero m e St ev en s o n , p ro s e. El i zab et h C. M o u rg es , Bart h o l o m ew Ci ren za, an dNan cy M . Gi l m o re, fo r res p o n d en t.

M EM ORANDUM OPINION LAUBER, J u d g e: Th i s wh i st l eb l o wer award cas e i s b efo re t h e Co u rto n a
m o ti o n fo r s u m

m ary ju d g m en tfi l edb y

the In t ern al Rev en ue Serv i ce (IRS o r res p o n den t ). Res p o n d en tco n t en d s thatth e IRS W h i s t l eb l o wer Offi ce (Offi ce) d i d
n o tab us e i t s d i s cret i o n i n reject i n g p et i t i o n er’ s cl ai m o nthe g ro u n d th ath e d i dn o t- 2
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[* 2 ] p ro v i d e i n fo rm at i o n reg ard i n g an y Fed eral t ax v i o lat i on . W e ag ree an d
acco rd i n g l y

wi l l g ran tth e m o t i o n . 1 Back gro u n d Th e fo l l o w i n g fact s are d eri vedfro m th e p art i es ’ p l ead i n g s an dm ot i o n p ap ers , i n cl u di n g a d ecl arat i o n th atat t ach edth e ad m i n i s trat i v e reco rd . As far as th e reco rdrev eal s , p et i t i o n er i s cu rren t l y i n carcerat edi na co rrect i o n al faci l i ty i n Cal i fo rn i a. Pet i t i o ner fi l eda Fo rm 2 1 1 , Ap p l i cat i o nfo r Awardfo r Ori g i n al In fo rm at i on , wh i ch th e Offi ce recei v edo n M arch 1 , 2 0 1 9 . Th e t ex t o f h i s Fo rm 2 1 1 i s l arg el y i n co m p reh en s i b l e. He ap p eared t o al l eg e t h ata t arg et t ax pay er, an i n d i
v i du al , h adfai ledt o g i v e h i m an das k thath e fi l l o u ta Fo rm W -9 , Reques tfo r Tax pay er Id en t i fi cat i o n Nu m b er an dCert i fi cat i o n. Pet i t i o n er d i d n otex p l ai nwh y th i s was p ro b l em at i c an dd i dn o tal l eg e t h atth e t arg eth adu n d erp ai d t ax o r h ad
v i o l at edan y i n t ern al rev en u e l aw. Pet it i o n er at t ach edt o h i s Fo rm 2 1 1 a o n e-p ag e d es cri p t io n o f a p ub l icl y

trad edi n t ern at i on al b o n dfu n d . He d i dn o tal l eg e an y
u n d erp aym en t o f t ax o r t ax v i ol at i o n b y th e fu ndo r i t s p ri n ci p al s .

1 Al l s t atut o ry

referen ces are t o th e In t ern al Rev en u e Co de i neffect atal l rel ev an t t i m es , an d al l Ru l e referen ces are t o the Tax Co urtRu l es o f Pract ice an d Pro cedure.- 3
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[* 3 ] Th e Offi ce referred p et i t i o n er’ s cl ai m t o Sco t tM art i n , a cl as s i fi er i n th e IRS Sm al l Bu s in es s / Sel f-Em

p l o y edOp erat i n g Di vi s i o n(SB/ SE). A cl as s i fi er i s an em pl o y ee o f an o p erat i n g d i vi si o n wh o s e ro l e i s “ t o d et erm in e i f t h e i n fo rm at i o n o n th e Fo rm

2 1 1 warran t s fu rt h er rev i ew.” In t ern al Rev enu e M an u al p t. 2 5 .2 .1 .3 .1 (2 ) (M ay

2 8, 2 0 2 0 ). M r. M art i n i n v es t i gat edp et i t i o n er’ s al l eg at i o n s b y ret ri ev in g an dan al y zi n g th e t arg ett ax p ay er’ s IRS acco u n ttran s cri p t s an dt ax retu rn s . M r. M art i nas cert ai n edth atth is i n d i v i dual h adrep ort edh i s i n co m e an dh adn o b al an ce du e. Co n cl u d i n g th atp et i t i o n er’ s al l eg at i o n s d i dn o tco v er a m at t er wi th i n th e Offi ce’ s p u rv i ew, M r. M art in reco m

m en ded“ [r] eject i n g [t h e] cl ai m fo r fai l in g t o i ncl u d e s p eci fi c an dcred i b l e i n fo rm at i o n t o s up p o rta p o t en t i al t ax v i o l at i on * * * as wel l as d o cu m en t at i o n t o s up p o rtthe cl ai m .” Th e Offi ce ag reedwi th Mr. M art i n’ s reco m m en d at io n an do nAp ri l 1 0 , 2 0 1 9 , i s su eda fi n al d et erm i n at i o nl et t er reject i n g p et it i on er’ s cl ai m . Th e l et t er s t at edi n p ert in en tp artth at“ [t ] h e cl ai m h as b een reject edb ecau s e t h e i n fo rm at i o n s ub m i t t edd i d n o t i d en t i fy an i ss u e reg ard i n g t ax u n d erp aym en t s o r v i o l at i o n s o f i n t ern al rev en u e l aws .” Th e l et t er i n fo rm ed p et it i on er: “ If y o ud i sag ree wi th th i s d et erm i n at i o n , y o u h av e 3 0 d ay s fro m the d at e o f t hi s l et t er t o fi l e a p et i t io nwi th th e Tax Co u rt . ”- 4
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[* 4 ] Pet i t i o ner p et i ti o n ed th i s Co u rt fo r rev i ew o f t h e Offi ce’ s d et erm i n at i o n . He
s i gn edan dd at edth e p et i t io n M ay 2 , 2 0 1 9 , b u tth e en v el o p e i nwh i ch i twas d el i v eredt o t h e Co u rtd o es n otb ear a p os t m ark . Th e Co urtrecei ved an d fi ledth e p et i ti o n o n M ay

1 3, 2 01 9
. OnM ay 1 9 , 2 0 2 0 , res p o n d en tfi leda m o ti o n fo r s u m m ary ju d gm en t u n d er Ru l e 1 2 1 . W e o rd eredp et i t i o n er t o res p on d t o t h atm o t i o nb y J u n e 3 0 , 2 0 2 0 , an d
s ub s equ en t l y

ex t en d edh i s t i m e t o res p o n dt o Au g u st2 1 , 2 0 2 0. Pet i t i o n er d i dn o t
res p o n d t o res p o n d en t ’ s m o t io n. Di s cu ss i o n A. J u ri s d i ct i o n Sect io n 7 6 2 3 (b )(4 ) p ro v i d es th at“ [a] ny d et erm i n at i o n reg ard i n g an award
* * * m ay , wi th i n 3 0 d ay s o f s u ch d et erm i n at i o n, b e ap p eal ed t o the Tax Co u rt (an dth e Tax Co u rts h al l h av e ju ri s d i ct i o nwi th res p ectt o s u ch m at ter).” Th e Offi ce i s s u edi t s d et erm i nat i o n l et t er t o p et i t i o n er o nAp ri l 1 0 , 2 0 1 9 . He s i gn edh i s p et i t i o n o n M ay

2 , 2 0 1 9 , b u tth e m ai l i n g d at e i s u n cl ear. See s ec. 7 5 0 2 (a). Th e p et i t i o n was recei v edan dfi l edb y th e Co u rto n M ay

1 3 , 2 0 1 9 , m o re t h an3 0 d ay s aft er t h e d at e o n wh i ch th e Offi ce i s s u edth e d et erm i n at i o nl et t er. Th e U.S. Co urt of Ap p eal s fo r t h e D.C. Ci rcu i t i s th e ap p el l at e v en u e fo r th i s cas e, as fo r wh is t l eb l o wer cas es g en eral l y . See s ec. 7 4 8 2 (b )(1 ) (p en u l t i m at e- 5
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[* 5 ] s en t en ce). W e th u s fo l l o w i t s p reced en t . See Go l s env . Co m m i s si on er, 5 4 T.C. 7 4 2 , 7 5 7 (1 9 7 0 ), aff’ d , 4 4 5 F.2 d 9 8 5 (1 0 th Ci r. 1 9 7 1 ). In M y ers v . Co m m i s s i o n er, 9 2 8 F.3 d1 0 2 5 , 1 0 3 4 (D.C. Ci r. 2 0 1 9 ) (qu o t i ng Go nzal ez v . Th al er, 5 6 5 U.S. 1 3 4 , 1 4 1 (2 0 1 2 )), rev ’ g an d rem an d i n g 1 4 8 T.C. 4 3 8 (2 0 17 ), th e D.C. Ci rcu i th el d th at s ect i o n 7 6 2 3(b )(4 ) s et s fo rt h a “ n o n juri sd i ct i o n al cl ai m p ro ces s i n g ru l e,” th e v io l at i o n o f wh ich d o es n o td ep ri v e a co u rto f au th ori ty t o h ear t he cas e. Th e ap pel l at e co u rtfu rt h er h el d th atth e s t atut e’ s 3 0 -d ay fi l i n g p eri o d“ i s s ub

j ect t o equ i t ab l e t o l l i n g .” Id . at1 0 3 7. Co n si s t en tl y

wi th M y ers , we h o l dth at we h av e ju ri s d ict i o nt o co n s i d er t hi s cas e. Si n ce n ei th er p art y h as qu es ti o n edth e fi l i n g o f t h e p et i t i on aft er t h e 3 0 -d ay p eri o do r ad dres s edthe s ub jecto f eq u i t ab l e t ol l i n g , we wi l l p ro ceed t o co n s i d er res p o n d en t’ s m o t i o n fo r s umm ary ju d g m en t . B. Su m

m ary J u dg m en tSt an d ard Th e p u rp os e o f s u m

m ary ju d g m en t i s t o ex p ed it e l i t i g at i o nan d av o i dco st l y , t i m e-co n s u m i n g , an du n n eces s ary tri al s . Fl a. Peach Co rp . v . Co m m i s si on er, 9 0 T.C. 6 7 8 , 6 8 1 (1 9 8 8 ). Un d er Ru l e 1 2 1 (b ) we m ay g ran ts u m

m ary ju d g m en twh en th ere i s n o g enu i n e d i s p u te as t o an y m at eri al factan da d eci s i o nm ay b e ren d ered
as a m at t er o f l aw. Su n d s tran dCo rp . v . Co m m i s s io n er, 9 8 T.C. 5 1 8, 5 2 0 (1 9 9 2 ), aff’ d , 1 7 F.3 d9 65 (7 th Ci r. 1 99 4 ). Ho wev er, t h i s s u m m ary ju d g m en ts t an d ard “ i s- 6
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[* 6 ] n o tg en eral ly

ap t ” wh en rev i ewi ng wh i s t l eb l o w er award d et erm i n at i o ns b ecau s e we “ co nfi n e o u rs el v es t o th e ad m in i s trat i ve reco rd t o d eci d e wh et h er t h ere h as b een an ab u s e o f d i s cret io n.” Van Bemm el en v . Co m m i s s i o n er, 1 55 T.C. _

_ ,

_ _ (s l i p o p . at2 5 ) (Au g. 2 7 , 2 0 2 0 ). In a “ reco rdru l e” wh i s t leb l o wer cas e

“ s u m m ary ju dg m en t s erv es as a m ech an i s m fo r d eci d i n g , as a m at t er o f l aw, wh et h er t h e * * * [Offi ce’ s ] act i o ni s s upp o rt edb y the ad m i n i s trat i v e reco rdan di s
n o tarb i trary , cap ri ci o u s , an ab u s e o f d is cret i o n, o r o th erwi s e n o ti n acco rd an ce wi th l aw.” Id . at_

_ (s l i p o p . at2 6 ). Becau s e p et i t i o n er d i dn otres p o ndt o th e m o ti o n fo r s u m m ary ju d g m en t , we co u lden t er d eci si o n ag ai n s t h i m fo r t h atreas o nal o ne. See Ru l e 1 2 1 (d ). W e wi l l
n ev erth el es s co n s i d er t h e m o t i on o ni t s m eri t s . C. An al y s i s W e rev iew t h e Secret ary ’ s d et erm i n at i o nas t o wh et h er a wh i s t l eb lo wer i s en t i t l edt o an awardu n d er s ect i o n 7 6 2 3 (b )(1 ) b y ap p l y i n g an ab u se-o f-d i s cret i o n s t an d ard . Kas p er v . Co m m i s si o n er, 1 5 0 T.C. 8 , 2 2 (2 0 1 8 ). Ab us e o f d i s cret i o n ex i s t s wh en a d et erm i n at i on i s arb i trary , cap ri ci o u s , o r wi th o u t s ou n d b as is i nfact
o r l aw. M u rp h y

v . Co m m i s s io n er, 1 2 5 T.C. 3 0 1 , 3 2 0 (2 00 5 ), aff’ d , 4 6 9 F.3 d2 7 (1 s tCi r. 2 0 0 6 ).- 7
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[* 7 ] In Lacey

v . Co m m i s s i o n er, 1 5 3 T.C. 1 4 6 , 1 6 6-1 6 9 (2 0 1 9 ), we h el d t h atwe h av e juri sd i ct i o n t o rev i ew, fo r ab us e o f d i s cret i on , a d et erm i nat i on b y th e Offi ce t o rejecta wh i s t leb l o wer cl ai m fo r fai l u re t o m eetcert ai n b as i c cri t eri a. See s ec. 3 0 1 .7 6 2 3 -1 (c)(1 ), Pro ced . & Adm i n . Reg s . (p ro v i d i n g th atcl ai m s m ay b e reject ed i f t h ey s up p l y “ s p ecu l at iv e i nfo rm at i on ” o r “ d o n o t p ro v i d e s peci fi c an d cred i b l e i n fo rm at i o n reg ard i n g t ax u n d erp aym en t s o r v i o l at i o n s o f i n t ern al rev enu e l aws ”). Wh en th e Offi ce reject s a cl ai m , “ th e wri t t en n o t i ce [t o th e cl ai m an t ] wi l l s t at e t he b as i s fo r t h e reject i o n . ” Sec. 3 01 .7 6 2 3 -3 (b )(3 ), Pro ced
. & Ad m i n . Reg s . Inas cert ai n i n g wh et h er t h e Offi ce ab u s ed i t s d i s cret i o n , we co n fi ne o u r rev i ew t o th e ad m i n is trat i v e reco rd . Kas p er, 1 5 0 T.C. at2 0
. Sect io n 7 6 2 3 (a) au th o ri zes th e p aym en to f s u m s n eces s ary fo r “ d et ect i n g
u n d erp aym en t s o f t ax ” o r “ d et ect i n g an d b ri ng i n g t o tri al an dp u n i s h m en tp ers o ns g u i l ty o f v i o l at i ng th e i n t ern al rev en u e l aws o r co n n i v i n g atth e s am e.” Sub s ect i o n (b )(1 ) p ro v i d es fo r n o n d is cret i on ary (i .e., m an dat o ry ) award s o f atl eas t1 5 % an d
n o tm o re t h an 3 0% o f th e co l l ect edp ro ceed s i f al l s t at edreq u i rem en t s are m et . Befo re an y

awardcan b e p ai d , s ect i o n7 6 2 3(b )(1 ) req ui res th atthe IRS fi rs tp ro ceed wi th an “ ad m i n is trat i v e o r ju d i ci al act i o n ” an dth enco l l ectp ro ceed s fro m the t arg ett ax p ay er. See Co h en v . Co m m i s s i o n er, 1 3 9 T.C. 2 9 9 , 3 0 2 (2 0 1 2 ), aff’ d , 5 5 0 F. Ap p ’ x 1 0 (D.C. Ci r. 2 0 1 4); Wh i s t l eb l o wer 1 4 1 0 6 -1 0 W v . Co m m i s s i o n er, 1 3 7- 8
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[* 8 ] T.C. 1 8 3 , 1 8 9 (2 0 1 1 ). W h i l e we h av e ju ri s d i ct i on t o rev i ew t h e IRS’ award d et erm i n at i o n , s ect i o n 7 6 2 3 g i v es u s n o au tho ri ty t o d i rect th e IRS t o co m

m en ce an ad m i ni s trat i v e o r ju d i ci al act i o n . Co o p er v . Co m m i s s i o n er, 1 36 T.C. 5 9 7 , 6 0 0
- 6 0 1 (2 01 1 ). If t h e IRS p ro ceed s wi th n o ad m in i st rat i ve o r ju d i ci al act i o n , th ere can b e n o wh i s t leb l o wer award . Id . at6 0 1
. Th e ad m i ni s trat iv e reco rds h o ws th at th e Offi ce p ro p erl y reject edp et i t i o n er’ s cl ai m b ecau s e h e d i d n o tp ro v i d e an y cred ib l e i n fo rm at i o n reg ard i n g a Fed eral t ax v i o l at i o n . Th e Offi ce b as edi t s d eci si o no na reco m m en d at i o nfro m

M r. M art i n, a cl as s i fi er i n SB/ SE. He i n v es t i gat edp et i t i o n er’ s cl ai m b y ret ri ev i n g an d
an al y zi ng th e t arg ett ax p ay er’ s t ax fi l i n g s an dIRS acco u n ttran s cri p t s . He d et erm i n ed th atp et it i o n er’ s al leg at i o n s l ack edcred i b i l i ty b ecau s e p et i t io n er d i dn o t i d en t i fy a p art i cu lar t ax y ear, d i dn o ti d en t i fy a d is cern i b l e Fed eral t ax i s s u e, an d d i dn o t s up p l y

an y s o u rce d o cu m en t s . Onth e b as is o f th e ad m i n i s trat i v e reco rd , we h av e n o d i ffi cu l ty co n cl u d i n g th atth e Offi ce d i dn o tab u s e i t s d i s cret i o ni nreject i n g p et i t i o n er’ s cl ai m fo r fai l ure t o al l eg e an y

Fed eral t ax i ss u e. W e wi l l th erefo re g ran tres p o n d en t ’ s m o t io nfo r s u m m ary ju d g m en t .- 9
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[* 9 ] To refl ectthe fo reg o i n g , Anap p ro p ri at e o rd er an dd eci s i o n wi l l b e en t eredfo r res p on d en t .