1 5 5 T.C. No . 4

UNITED STATES TAX COURT

M ICHAEL VAN BEM MELEN, Pet it io n er v . COM M ISSIONER OF INTERNAL REVENUE, Res po n d en t

Do ck etNo . 1 9 7 87 -1 8 W
. Fi l edAu gu s t 2 7 , 2 0 2 0
.

In 2 0 1 8 P s ub m it t edt o th e W BO o f t h e IRS, p u rs u an t t o I.R.C. s ec. 7 6 2 3 (b )(1 ), a Fo rm 2 1 1 , Ap pl i cat io n fo r Awardfo r Ori g in al In fo rm at i o n , m ak i n g al l eg at i o n s ag ai n s t T. P’ s Fo rm 2 1 1 referen ced an earl i er 2 01 2 s ub m i s s i o n rel at i n g t o T an d s ev eral o ther t ax p ay ers . P’ s cl ai m was fo rward edt o a cl as s i fi er i n t h e W BO an dth enas s i g ned fo r rev i ew t o a cl as s i fi er i n th e IRS LB&I. On th e b as i s o f t h e l at t er’ s reco m m en d at i o n, i n 2 0 1 8 th e W BO reject edP’ s cl ai m fo r an award b ecau s e “ th e i nfo rm at io n p ro v i dedwas s p ecu l at iv e an d/ o r d idn o t p ro v i d e s p eci fi c o r cred i b l e i n fo rm at i on reg ard i n g t ax u n d erp aym en t s o r v i o lat i o n s o f i n t ern al rev en u e l aws . ” Aft er P p et i t i o n edth is Co u rt , R m ov edfo r s u m

m ary ju d g m en tu n d er Ru l e 1 2 1 an d s ub m i t t eda cert i fi edad m i n i st rat i v e reco rd , n oti ncl u d in g th e 2 0 1 2 s ubm i s s i o n. P m o v edt o s up p l em en t th e ad m i n i s trat i v e reco rdwi th two i t em s : (1 ) th e 2 0 1 2 s ub m i s s i o n, an d(2 ) a d ocu m en trefl ect i n g a p res en t at i o n th atP m ad e t o IRS Cri m i n al In ves t i gat i o n Di v i s i o n ag en t s i n 2 0 1 9 (2 0 1 9 d o cu m en t ).- 2
- Hel d : In o rd er t o o v erco m e th e p res um p t i o n th atR h as p ro p erl y d es i g n at edth e ad m i n i s trat i ve reco rd , P m u s tm ak e a s ub s t an t i al s h o wi n g wi th cl ear ev i d en ce. Hel d , fu rt h er, b ecau s e P h as m ad e a s ub s t an t i al s h o w i n g wi th cl ear ev i d en ce t h ath is 2 0 1 2 s ub m i ss i o n i s p ro p erl y i ncl u d edi n th e ad m i n i s trat iv e reco rd , P’ s m o t io n t o s up p lem en tth e reco rdwi l l b e g ran tedi ns o far as i trel at es t o th e 2 0 1 2 s ub m i s s i on . Hel d , fu rt h er, b ecau s e P h as n o td em o n st rat edth atth e 2 0 1 9 d o cu m en tm eet s an y

ex cep t i o n fo r co n s u l t i n g ex trareco rdev id en ce, s ee Ci ty o f Dan i a Beach v . FAA, 6 2 8 F.3 d 5 8 1 , 5 9 0 (D.C. Ci r. 2 0 10 ), P’ s m o t io n t o s upp l em en tth e reco rd wi l l b e d en i edi n s o far as i t rel at es t o t he 2 0 1 9 d o cu m en t
. Hel d , fu rt h er, b ecau s e t h e l aw p ro v id es that , i n an al y zi n g i n fo rm at i o n recei v edfro m an i n d i v i du al , th e W BO “ i n i t s s o l e d i s cret i o n , m ay

as kfo r ad d i t i o nal as s i s t an ce fro m s u ch i n d i v i du al o r an y l eg al rep res en t at iv e”, Tax Rel i ef an d Heal th Care Act o f 2 00 6 , Pub . L. No . 1 0 9 -4 3 2 , s ec. 4 0 6 (b )(1 )(C), 1 2 0 St at . at2 9 6 0 , an dth e s t atu t e p ro v i d es n o m ean i n g fu l s t an d ard ag ai ns twh ich t o ju d g e t h e W BO’ s ex erci se o f t h at d i s cret i o n , th e W BO’ s ex erci s e o f d i s cret i o n i n n o tas k in g fo r ad di t i o n al as s i s t an ce fro m P o r h i s at t orn ey i s i m m u n e fro m ju d i ci al rev i ew. Hel d , fu rt h er, t h e W BO Di rect or d i dn o ti m p ro p erl y red el eg at e h i s au th o ri ty

t o an al y ze P’ s i n fo rm at i on . Hel d , fu rt h er, b ecau s e t h e W BO’ s reject i o n o f P’ s cl ai m i s s up p o rt ed b y

th e ad m i n i s trat i v e reco rd , as co m p l et ed , an d was n o t arb i trary , cap ri ci o us , an ab u s e o f d i s cret io n , o r o th erwi s e n o ti n acco rd an ce wi th l aw, R’ s m o t i o n fo r s u m m ary ju d g m en twi l l b e g ran ted
.- 3
-

M i ch ael Van Bemm el en , p ro s e. Ni co l e M
. Co n n el l y , fo r res p o n d en t.

OPINION THORNTON, Jud g e: Pet i t io n er i n i t i at ed th i s act i o n u n d er s ect io n 7 6 2 3 (b )(4 ) s eek i n g rev i ew o f a d et erm i n at i o n b y th e In t ern al Rev enu e Serv i ce (IRS) W h i st l eb l ower Offi ce (W BO) reject i n g h is cl ai m fo r an award
. 1 Pen d i n g b efo re t h e Co u rtare (1 ) res p o n d en t ’ s m o t i o n fo r s u m m ary ju d g m en t , fi l edJ u l y

1 2 , 2 0 1 9 , (2 ) p et i t i o n er’ s m ot i o n t o s up p lem en tth e reco rd , fi l edM arch 2 , 2 0 2 0 , an d (3 ) p et i t i o n er’ s fi rs ts up pl em en tt o m ot i o n t o s upp l em en t th e reco rd , fi l edM arch 2 , 2 0 2 0 . As d i s cu s s edb el ow, we wi l l g ran ti n p artan dd en y i n p artp et i ti o n er’ s
m o ti o n t o s up p l em en t th e reco rd , as s up p l em en ted , an dwe wi l l g ran tres po n d en t ’ s
m o ti o n fo r s u m

m ary ju d g m en t
.

1 Un l es s o th erwi s e i nd i cat ed , al l s ect i o n referen ces are t o th e In t ern al Rev enu e Co de, an dal l Ru l e referen ces are t o the Tax Co urtRu l es o f Pract ice an d Pro cedure.- 4
- Back gro u n d Th e fo l l o w i n g fact s are d rawn fro m the p l ead i n gs an d m o t i o n p ap ers , i n cl u d i n g two d ecl arat i o n s an dth e ex h i bi t s at t ach edth eret o , an d the ad m i n is trat i v e reco rdas cert i fi edb y res p o n d en tan d as co m

p l et edi n th i s p ro ceed in g . OnM arch 1 2 , 2 0 1 8 , Li n da J . St en g le, Es q ., s ubm i t t edt o th e W BO o n p et i t i o n er’ s b eh al f a Fo rm 2 1 1 , Ap p l i cat i o n fo r Awardfo r Ori g in al In fo rm at i o n . M s . St en g l e’ s co v er l et t er s t at es : Th i s o ffi ce rep res en t s Dr. M i ch ael Van Bemm el en [p et i t i o n er] i n h i s wh i s t l eb l ower reward cl ai m fo r a m o s t eg reg i o u s t ax ev as i o n s ch em e p erp etrat edb y

* * * [t he n am edt arg ett ax p ay er] . Th ro u gh th i s l et t er, I am h o p in g t o o b t ai n t h e co rrect cl ai m n u m b er fo r t h i s p o t en t ial co rp orat e d efen dan tan d/ o r v eri fy th atthe ap p ro p ri at e fo rm h as b een recei v edb y

th e Serv i ce. An ex ecu t ed2 1 1 fo rm i s en cl o seds h o u l d th i s n otb e th e cas e. Dr. Van Bemm el en u n co v eredth i s co m p l i cat edt ax ev as io n s ch em e an dfi rs trep o rt edd et ai l s o f t h e s ch em e t o th e Serv ice p ri o r t o 2 01 2
. Si n ce t h en , Dr. VanBemm el en s up p l em en t edh i s o ri g i n al rep o rtwi th m o re d et ai l s t o th e Serv ice, i n cl u d in g d et ai ls ab o u to ther p o t en t ial t ax p ay er d efen d an t s. Ov er t i m e, Dr. Van Bemm el ens up p l em en t ed h i s o ri g in al rep o rtwi th m o re d et ai l s t o th e s erv i ce, i n cl u d i ng d et ai ls ab o u to ther p o t en t i al t ax p ay er d efen d an ts . Ov er t i m e, Dr. Van Bemm el en s ub m i tt edad d i t i o n al Fo rm s 2 1 1 t o en s u re t h ath is ri g h t s t o a p o t en t ial wh i s t l eb l o wer award fo r t h i s p o ten t i al t ax p ay er d efen d an t are p ro t ect ed
.- 5
-

Aft er fi rs trep o rt i ng th e m i s co n du ctt o the IRS p ri o r t o an d ag ai n i n 2 0 1 2 as wel l as 2 01 6 , Dr. VanBemm el en al s o rep o rt ed the s ch em e t o * * * [v ari o u s U.S. an dSt at e at t o rn ey s g en eral ]
. W e al s o i n cl u d e Dr. Van Bemm el en ’ s o ri gi nal rep o rt s fro m h i s 2 0 1 6 s ub m i s s io n wi th th e fo rm 2 1 1 wi th i n fo rm at i o n ab o u t wh ath as b een rep o rt edt o o th er g o v ern m en tag en ci es ab o u tth e p o t en t i al t ax p ay er d efen d an t s aft er t h ey

were fi rs trep ort ed t o t h e IRS. En cl o s edwi th M s. St en g l e’ s M arch 1 2 , 2 01 8 , l et t er i s a Fo rm 2 1 1 , s i g n ed b y p et i t i o n er o n M arch 5 , 2 0 1 8, al leg i n g i n co m e t ax v i ol at io n s b y th e t arg et t ax p ay er, a g lo b al i n s u ran ce co m p an y (t arg et ). In res p o ns e t o th e d irect i v e “Nam e
an d t i t le an dco n t acti n fo rm at i o n o f IRS em p l o y ees t o wh o m

v i o l at i o n was fi rs t rep o rt ed , i f kn own ” p et i t i o n er’ s Fo rm 2 1 1 s t at es : “ Wri t t encl ai m s s ub m it t edt o IRS W O , Oct o ber 2 0 1 2. Verb al rep o rt s o f v i o l at i o n s t o IRS b eg i nn i n g i n 2 0 0 4 .” Onth e Fo rm

2 1 1, the b o x es fo r “New s ub m i s s io n ” o r “ Sup p l em en t al s ub m i s s i o n ” are b o th l eftu n ch eck ed . Inres p o n s e t o th e as s o ci at edd i rect i v e “ If a s up pl em en t al
s ub m i s si o n , l i s t p rev i o u sl y as s i g n edcl ai m n um b er(s )” p et i t io n er’ s Fo rm 2 1 1
s t at es : “ See at t ach edh i st o ry o f cl ai m s .” Al s o en cl o s edwi th M s. St en g l e’ s M arch 1 2 , 2 0 1 8 , l et t er i s an u n d at ed1 1
- p ag e d o cu m en tcap t i on ed“ FORM 2 1 1 NARRATIVE”. Th i s d ocu m en tas s ert s th ati n h i s cap aci ty as a fi n an ci al ad v i s er fo r i nt ern at i o n al i n ves t m en tb an k s , p et i t i o n er h ado bt ai n edi n fo rm at i o n i n d i cat i n g th atth e t arg etwas a “ co -- 6
-

co n sp i rat o r” i n a co m

p l i cat edt ax -ev as i o n s ch em e i n v o l v in g i n v es t m en ts i n p o rt fo l i o s o f l i fe i n s u ran ce p o l i ci es . Th i s d o cu m en t al l eg es th atth e t arg eten g ag ed i n “ m o n ey

l au n d eri n g ” b y

p ro v i d i n g fu n ds an dfaci l i t at i ng b an kl o an s t o a t h i rd

p art y “p h an t o m

t ax ex em p tco m p an y , p u rp o rt ed l y

l o cat ed i n the U.S. Vi rg in Is l an ds ” wh i ch en g ag edi n n on ex em p tarb i trag e act i v i ty

i n vo l v i n g l ife i n s u ran ce p o rt fo l i o s. Acco rd i n g t o th i s d o cu m en t , th e t h ird -p arty co m p an y an di t s affi l i at es i m p ro p erl y t o ok ad v an t ag e o f U.S. Vi rg i n Is l an d s t ax i n cen t i v es fo r ex em p t act i vi t i es an dev ad edh u n dred s o f m il l i o n s o f d ol l ars o f t ax es . Th e d o cu m en tal s o al l eg es th atth e t arg eth adb orro wed fu n ds wh i ch were u s ed , thro u g h t h e
m ech an i s m

o f i n t erco m

p an y l o an s am o n g cert ai n o f th e t arg et ’ s affi l i at es , t o p u rch as e l i fe i n s u ran ce s et t l em en tp o li ci es o n th e s eco n d ary m ark etan d p ay

th e p rem i u m s o n th e p u rch as edp o l i ci es . Th e d o cu m en tal l eg es thatth e t arg et v i o l at ed
s ect i on 2 6 4 (a) b y

d edu ct i n g th e i n t eres ti n cu rred fo r fi n an ci n g s eco n d ary -m ark et l i fe i n s u ran ce i n ves tm en t s , th ereb y ev ad i n g an es t i m at ed$ 8 5 8 ,0 8 2 ,5 0 0 o f Fed eral t ax es fro m

2 0 0 1 th ro u g h th e t h i rdqu art er o f 2 0 1 5
. Al s o en cl o s edwi th M s. St en g l e’ s M arch 1 2 , 2 0 1 8 , l et t er t o th e W BO i s an
u n s i g n edco p y

o f a l et t er t o the W BO d at edM arch 1 , 2 01 6 , “ Re: New Cl ai m ”. Th i s earl ier l et t er, m

u ch l i k e M s . St en g l e’ s M arch 1 2, 2 0 18 , l et t er, i n d i cat es th at
s h e rep res en tedp et it i o n er i n h i s effo rt s t o o b t ai n IRS wh i s t l eb lo wer award s o n th e- 7
-

b as i s o f h i s cl ai m

o f t ax ev as i o n b y

th e t arg et . Th i s l et t er, co n si s t en twi th th e

“ FORM 2 1 1 NARRATIVE” p rev i o u sl y d es cri b ed , s t at es th atp et i t i o ner es ti m at es th e t arg et ’ s u np ai dFed eral t ax t o b e “ ap pro x i m at el y $ 8 5 8 ,0 8 2 ,5 0 0”. Th e l et t er g o es on t o s tat e t h atd et ai l s o f t h i s p u rp o rt edm is co n du ctap p ear i n “ the at tach ed Fo rm 2 1 1 an d Fo rm

2 1 1 Narrat i v e.” Th e co p y o f t h e M arch 1 , 2 0 1 6 , l et t er
en cl o s edwi th M s . St en g l e’ s M arch 1 2 , 2 0 1 8, l et t er d o es n o ti n cl u d e an y at t ach ed Fo rm 2 1 1 o r “ Fo rm

2 1 1 Narrat i v e” ap artfro m th e Fo rm 2 1 1 s i g nedb y

p et it i o n er
o n M arch 5 , 2 0 1 8 , an dth e u n d at ed“ FORM 2 1 1 NARRATIVE” p rev i o u s l y d es cri b ed
. OnM arch 2 1 , 2 0 1 8 , th e W BO recei v edp et i ti o n er’ s Fo rm 2 1 1 d at edM arch 5 , 2 01 8 . Itwas as s ig n edcl ai m No
. 2 0 1 8-0 0 6 8 0 1 . By

l et t er d at edAp ri l 3 , 2 0 1 8 , ad dres s edt o p et it i o n er c/ o M s . St en g l e’ s l aw fi rm , th e W BO ack n o w l ed ged recei v i ng th is cl ai m . By

a s ep arat e l et t er t o M s . St en gl e, al s o d at edAp ri l 3 , 2 0 1 8 , th e W BO ad vi sed h er t h atb ecau s e s h e h adfai l edt o s ubm i ta v al i dFo rm 2 8 4 8 , Po wer o f At t o rn ey

an dDecl arat i o n o f Rep res en t at i v e, t he W BO was req u i redt o
co m m u n icat e d i rect l y

wi th p et i t i o n er ab o u t thi s cl ai m .- 8
-

Pet i t i o ner’ s cl ai m

was fo rward edt o a cl as si fi er i n th e W BO. 2 On Ap ri l 1 2 , 2 0 1 8 , th i s cl as s i fi er p rep areda cl as s i fi cat i o n ch eck l i s tm em o ran du m , i nd i cat i n g p et i t i o n er’ s cl ai m

as ari s i n g u n d er “ IRC 7 6 2 3(a)/ (b )” an d n o t i n g “ [a] ll eg edam ou n t i n d i s p u t e i s g reat er t h an$ 2 ,0 0 0 ,0 0 0 ”. 3 Th i s m em o ran du m i n d icat es th at th e cl as s ifi er: “ Res earch ed ICE [In i t i al Cl ai m Ev al u at i o n ] cl ai m s s i n ce W B [wh is t l eb l o wer] referen cedp ri o r cl ai m s . No cl ai m s l o cat ed .” 4 Th e W BO cl as s ifi er reco m

m en d edthatth e cl ai m

b e referred t o the Larg e Bu s i n es s & In t ern at io n al Di v is i o n (LB&I) o f t h e IRS fo r cl as s i fi cat i o n. OnAp ri l 1 3 , 2 0 1 8 , p et i t i o n er’ s cl ai m

was referred t o LB&I fo r cl as si fi cat i o n . By co v er l et t er d at edM ay

1 , 2 0 1 8 , M s . St en g l e t ran s m i tt ed t o t h e W BO a Fo rm 2 8 4 8 d at edAp ri l 1 3 , 2 0 1 8 , au th o ri zi n g h er t o rep res en tp et i ti o n er wi th

2 A cl as s i fi er i s an IRS em p l o y ee wh o s e ro l e i s “ to d et erm i n e i f th e i n fo rm at i o n o n th e Fo rm

2 1 1 warran t s fu rt her rev i ew.” In t ern al Rev en u e M an u al (IRM ) p t
. 2 5 .2 .1 .3 .1 (2 ) (M ay 2 8 , 2 0 2 0 ).
3 Sec. 7 6 2 3(b ) ap p l i es t o cert ai n wh i s t l eb l o wer cl ai m s wh ere t h e p ro ceed s i n d i s p u t e ex ceed $ 2 m i l li o n . Sec. 7 6 23 (b )(5 )(B).

4 Th e In i t i al Cl ai m

Ev al u at i o n Un it(ICE) act s as th e “ pri m ary recei p t an d co n tro l fu n ct i o n res p o n s i b l e fo r p erfo rm i n g wh i s t l eb l ower cl ai m i n t ak e, m o ni t o ri n g , awardp ro ces s i n g , an d res po n d i n g t o co rres po n d en ce an dt el ep h o n e i n qu i ri es fro m

i n t ern al an dex t ern al cu s t o m ers .” IRM p t . 1 .1 .2 6 .1 .3 .5 (1 ) (J an . 1 1 , 2 0 1 8 ). Effect i v e J u l y

1 0 , 2 0 16 , th e IRS Sm al l Bu s i nes s / Sel f-Em p l o y edDi v i s i o n was as s i g n ed“ o p erat io n al res p o n s i b i l i ty ” fo r ICE wh i l e t h e W BO ret ai n ed
“p ro cedu ral an dp ol i cy

o v ers ig h t ” o f ICE. Id . p t . 1 .1 .2 6.1 .3 .5
.- 9
-

reg ardt o “ Fo rm s 2 1 1 / Cl ai m Nu m b er 2 0 18 -0 0 6 80 1 ”. In a l et ter d at ed M ay 2 5 , 2 0 1 8 , referen ci n g cl ai m

No . 2 0 1 8 -0 06 8 0 1 , M s . St en g l e s ubm i t t eda t hree-p ag e

“ s up p l em en t al n arrat i v e” t h ato ffered a “ s ho rt , s t ep -b y -s t ep s umm ary ” o f th e “ t ax
ev as i o n s ch em e” p u rp o rt ed ly p erp etrat edb y

th e t arg et . Th i s s u m

m ary rei t erat ed p et i t i o n er’ s cl ai m s th atth e t arg eth ads o u gh tt o ev ad e t ax es b y p u rch as i n g i n v es t m en t s i n the s eco n d ary l ife i n s u ran ce m ark et wi th b o rro wedfu n d s an d i m p ro p erl y d edu ct i n g th e i n t eres t . En cl o s edwi th th is l et t er was a n ew Fo rm 2 1 1,
s i gn edb y p et i ti o n er o n M ay

2 5 , 2 0 1 8 , wh i ch i n d icat edth ati t was a “ s up p l em en t al
s ub m i s si o n ” t o cl ai m No . 2 0 1 8 -0 0 6 8 0 1 . Th i s Fo rm 2 11 l eft m an y l in es b l an kan d
co n tai n edn o i n fo rm at i o n n otfo u n di n p et it i o n er’ s M arch 5 , 2 0 1 8, Fo rm 2 1 1
. By l et t er d at ed J ul y

9 , 2 01 8 , referen ci n g cl ai m No . 2 0 1 8 -0 0 6 8 0 1 , th e W BO ack n owl ed gedrecei v i n g the co rres p o n d en ce d at edM ay 2 5 , 2 0 1 8 , s t at i n g: “ Yo u r cl ai m i s s t i l l o p en an du nd er act i v e co n s i d erat i o n .” OnSep t em

b er 7 , 2 01 8 , p et i t i on er’ s cl ai m was as s i g n edfo r rev iew t o An al i s a Grav es , a cl as s i fi er i n LB&I. M s. Grav es p rep ared a cl as s i fi cat i o n ch eck l i s tm em oran du m

wh i ch s t at es , am o n g o th er t h i n g s , th atp et i t i o n er h ad al l eg edth atthe t arg eth ad co n sp i red“ t o ev ad e m i ll i o n s i n fed eral an dl o cal t ax es ”
an d th at“ [t ] he es t i m at edd o l lar am o u n t o f t he t ax l i ab i l i ty i s l es s th an $ 2 m i l l i o n .” Th e m em o ran du m

cl as s i fi es p et i t i o n er’ s cl ai m as ari s i n g u n d er “ IRC 7 6 2 3 (a)”,- 1 0 -

n o t i n g th at“ [a] l l eg at io n s m eet7 6 2 3 (a) cri t eri a”. In th e m em oran du m M s. Grav es
reco m m en d s th at p et i t i o ner’ s cl ai m b e reject edo n th e b as i s that“ [a] l leg at io n s are
n o ts p eci fi c, cred i b l e, o r are s p ecu l at i v e--[a] l l eg at i o n s are p u rel y s p ecu l at i v e i n
n atu re”. Th e m em o ran du m al s o s t at es : Th e i n fo rm at i o n o b t ai n edi n th is cl ai m i s referen cedt o th e cl ai m an t ’ s o ri g in al cl ai m

(2 0 1 2 -0 0 3 6 5 3 ). Th e o ri g i n al cl ai m was d et erm i nedt o l ack s ub s t an ce. Th e s up p l em en t al i n fo rm at i o n p ro v i d edi n th is cl ai m d o es n o th av e en o u g h i n fo rm at i o n t o s up p ortth e al l eg edv i o l at i o n s . Th e cl ai m

s h o u l d b e reject ed
. OnSep t em

b er 1 1 , 2 0 1 8 , M s . Grav es retu rn edp et i t i o ner’ s cl ai m t o th e W BO wi th h er reco m

m en dat i o n . On th ats am e d at e, p et i t i o n er’ s cl ai m was as s i g n edt o J es s i ca Ro b i s o n i n ICE. Sh e recei v edM s . Grav es ’ cl as s i fi cat i on ch eck l i st
m em o ran du m

an do n Sep t em

b er 1 1 , 2 0 1 8 , p rep aredan AwardReco m m en d at i o n M em oran du m

(ARM ), ad op t i n g th e cl as s i fi er’ s reco m m en d at io n s . Al s o o n Sep t em

b er 1 1 , 2 0 1 8, res p o nd en t i s s ued t o p et i t i on er a fi n al d et erm i n at i o n l et t er cap t i o ned“ FINAL DECISION UNDER SECTION 7 6 2 3 (a)”. Th i s l et t er s t at es thatthe W BO h adco n s i d eredp et i t i o n er’ s Fo rm 2 1 1 d at edM arch 5 , 2 01 8 , an dh adm ad e “ a fi n al d eci s i o n t o rejecty ou r cl ai m fo r anaward .” Th e l et t er g o es o n t o s t at e t h atp et i t i o n er’ s cl ai m h adb een “ reject edb ecau s e t h e i n fo rm at i o n p ro v i d edwas s p ecu l at i v e an d/ o r d i dn o t p ro v i d e s p eci fi c o r 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 .”- 1 1 -

Th e l et t er s t at es th ati t“ i s a fi n al d et erm i n at i on fo r p u rp o s es o f fi l i ng a p et i t i o n wi th th e Un i t edSt at es Tax Co u rt .” Th ere i s n o ev i d en ce t h atthe IRS ev er co m m en ced an act i o n ag ai n s t , o r
co l l ect edp ro ceed s fro m , th e t arg etas a res u l t o f t h e i n fo rm at i o n p et i t i o ner
s up p li ed
. Pet i t i o ner t i m el y

p et it i o n edth i s Co u rt . OnJ u l y 1 2 , 2 0 1 9 , res p on d en tfi l eda
m o ti o n fo r s u m

m ary ju d g m en t , s upp o rt ed b y

two u n s wo rn d ecl arat i o n s u n d er p en al ty o f p erju ry

b y M s . Grav es an dM s . Ro b i s o n . OnAu gu s t1 2 , 2 0 1 9, p et i t i o n er fi l edh i s o p p o s i t io n t o res p o n d en t ’ s m o t i o n fo r s u m m ary ju d g m en tfi l edJ u l y

1 2 , 2 0 1 9 . Al s o o n Au g u s t1 2 , 2 01 9 , p et i ti o n er fi led a fi rs ts up p l em en t t o o p p o s i t i o n t o m o t i o n fo r s u m m ary ju d g m en t , wh i ch i n cl u d es as an ex h i b i ta co p y o f a l et t er, d at edDecem

ber 1 2 , 2 0 1 2 , fro m

M s . St en g l e t o th e W BO, an dan acco m p an y i n g 2 0 -p ag e d o cu m en tcap t i o n ed“ IRS FORM 2 1 1 ATTACHM ENT” (2 0 12 s ub m i s s i o n ). M s . St en g l e’ s Decem b er 1 2 , 2 0 1 2 , l et t er referen ces cl ai m No . 2 0 1 2-0 0 3 65 6 an di n di cat es thatp et i t i o n er i s
res ub m i t t i n g ad di ti o n al Fo rm s 2 1 1 as rel at e t o cert ai n i n d i v i dual s an d en t i t i es b u t d o es no treferen ce t h e t arg et
. 5 Th e at t ach ed“ IRS FORM 2 1 1 ATTACHM ENT” l i st s 1 5 tax p ay ers (n o ti n cl u d i n g th e t arg et ) as th e s ubjecto f p et i t i on er’ s

5 Th e co py

o f t h e l et t er s ub m i t t edb y p et i t i o n er i n cl ud es n o Fo rm 2 1 1
.- 1 2 -

wh i st l eb l o wer cl ai m . Itd es cri b es a “ co n t i n u i n g m i s u s e o f USVI i n s u ran ce
co m p an y t ax ex em p ti o n” b y cert ai n n am edi n d i v i du al s an d as s o ci at eden t i t i es . Th i s d ocu m en tp ro v i des ad d it i on al b ack g ro u n dab o u tth e al l eg ed“ m o n ey l au n d eri n g act i v i t ies ” as d es cri b ed i n th e “ FORM 2 1 1 NARRATIVE” en cl o s ed wi th M s . St en g l e’ s M arch 1 2 , 2 0 1 8 , l et t er wi th res p ectt o th e t arg et . Th e 2 0 1 2
s ub m i s si o n d o es n o ts p eci fi cal l y al l eg e t ax ev as i o n b y

the t arg et , h owev er, b u t
co n cl u d es b y

s t at in g t h atp et it i o n er “ wi ll p ro v i d e a fu tu re s up p lem en td et ai l i n g
* * * [t h e t arg et ’ s ] ro l e i n t h e * * * s ch em e o n ce t h e Rel at or’ s [p et i t i o ner’ s] l eg al t eam co ncl u d es i t s an al y s i s .” Aft er ad d it i o n al b ri efi ng , o n J an u ary 1 3 , 2 0 2 0 , th e Co urto rd eredres p o n d en t t o fi l e a rep o rt , at t ach i n g th eret o th e ad m i n i s trat i v e reco rdi n t h i s cas e as co m p il ed b y th e W BO. On Feb ru ary

1 0, 2 0 2 0 , res p o n d en tfi l eda s t atus rep o rt , at tach i n g th eret o a cert i fi edco py

o f t h e ad m i n i s trat iv e reco rd
. OnM arch 2 , 2 02 0 , p et i t io n er fi l eda m o t i o n t o s up p lem en tth e reco rd , al o n g wi th a fi rs t s up p l em en t t o m o t i o n t o s upp l em en t th e reco rd , requ es t in g th atth e ad m i n is trat i v e reco rdb e s up pl em en t edwi th two i tem s th at are n o t i n cl u d edi n th e
m at eri al s th atres p o n den tcert i fi edas th e ad m i n i st rat i v e reco rd : (1 ) t h e 2 0 12
s ub m i s si o n , an d(2 ) a d o cu m en tcap t i o n ed“ Co rp o rat e i den ti ty frau dan dcl ai m

o f U.S. Vi rg i n Is lan d s t ax ex em p ti o n ”, d at edSep t em

b er 3 , 2 01 9 , wh ich rep res en t s ,- 1 3 -

acco rd i n g t o p et it i o n er’ s d es cri p t i o n o f i t , a p res en t at i o n thath e m ad e t o IRS Cri m i n al In v es t i g at i o n Di v i s i o n ag en t s o n Sep t em b er 5 , 2 0 1 9 , fo cu s i ng o n “ th e
o ri g i nal cl ai m

[i .e., the cl ai m

refl ect edi n M s . St en g l e’ s Sep t em b er 1 2 , 2 0 1 2 , l et ter]
an d th e ro l e o f * * * [t h e t arg et ’ s ] affi l iat es i n p ro m o t i n g an d b en efi tt i ng fro m th e frau d” (2 0 1 9 s ub m i s s i on ). OnM arch 1 3 , 2 0 2 0 , res po n d en tfi l edh i s res p o n s e t o th e m o ti o n t o
s up p lem en tthe reco rd , as s up p l em en t ed , o p p o s i n g th e g ran t i n g o f p et i t i o n er’ s
m o ti o n . OnAp ri l 7 , 2 02 0 , p et i t i o n er fi l eda rep l y t o t h atres p o n s e. Di s cu ss i o n A. Juri s d i ct io n Sect io n 7 6 2 3 (a) au th o ri zes th e Secret ary t o p ay d i s cret i o n ary

wh i s t l eb l o wer award s fro m

co ll ect edp ro ceed s . Sect i o n 7 6 2 3 (b ) m ak es wh i s t leb l ower award s
m an d at o ry

i f cert ai n s t atu to ry

req ui rem en t s are m et
. On e o f t h e req ui rem en t s i s th atth e p ro ceed s i n d i sp u te ex ceed $ 2 m i l l i o n . Sec. 7 6 2 3 (b )(5 ). Sect i o n 7 6 2 3 (b )(4 ) g i v es th e Tax Co u rtjuri s d i ct i o n o v er “ [a] ny d et erm i n at i o n reg ard i n g an awardu n d er p arag rap h (1 ), (2 ), o r (3 )” o f s ubs ect i o n (b ), i n cl u di n g reject i o n s an d d en ial s o f cl ai m s fo r award s. See Lacey v . Co m m i s s io n er, 1 5 3 T.C. 1 46 , 1 6 3 (2 0 1 9).- 1 4 -

Th e fi n al d et erm i n at io n l et t er up o n wh ich th i s cas e i s p red i cat edi s cap t i on ed“ FINAL DECISION UNDER SECTION 7 6 2 3 (a)”. 6 Al th o ug h i t d o es
n o tex pres s l y

refer t o s ect i o n 7 6 2 3 (b ), i treject s p et i t i o n er’ s cl ai m fo r an awardan d
s t at es th atth i s “ i s a fi n al d et erm i n at i o n fo r p u rp o ses o f fi l i n g a p et i t io n wi th th e Un i ted St at es Tax Co u rt ”, t h ereb y i m p l i ci t ly ackn o wl ed g i n g thatth i s i s a d et erm i n at i o n u n d er s ect i on 7 6 2 3 (b ). W e co ncl u d e th atwe h av e ju ri sd i ct i o n o v er th i s cas e. See Li p p o l i s v . Co m m i s s i o n er, 1 4 3 T.C. 3 93 , 3 96 n .2 (2 0 1 4) (“ Den y in g a wh i st l eb l o wer’ s cl ai m u n d er s ec. 7 6 2 3(b ) wi tho u ts ay i n g s o d o es n otd ep ri v e t h is Co u rto f ju ri s d i ct i o n .”). B. St an d ardan dSco p e o f Rev i ew In rev iewi n g a d et erm i n at i o n o f t h e W BO, we em p l o y the s t an d ardo f
rev i ew o f s ect i o n 7 0 6 (2 )(A) o f th e Ad m i n i s trat i v e Pro cedure Act (APA), wh i ch t el l s a rev i ewi ng co u rtt o rev ers e ag en cy act i o n th ati tfi n d s “ arb i trary , cap ri ci o u s ,

6 As d i s cu s s edi n fra n o te 1 5 an dth e as s o ci at edt ex t , th i s ch aract eri zat i o n o f p et i t i o n er’ s cl ai m

as ari s i n g u n d er s ec. 7 6 2 3 (a) ap pears co ns i s ten twi th th e d i rect i v es o f IRM p t . 2 5 .2 .2 .7 .1 (2 ) (J an . 1 2 , 2 01 8 ), reg ard i n g t h e t reat m en to f cl ai m s thatare reject edas s p ecu l at i v e. Al th o u g h we fi n dth o s e d i rect i v es i n s tru ct i v e i n u n d ers t an d in g t h e p ro cedu res th e IRS ex p ect s i t s em p l oy ees t o fo l l o w , s ee W ad l ei gh v . Co m m i s s i o n er, 1 3 4 T.C. 2 8 0 , 2 9 4 n . 1 3 (2 0 1 0 ), th e IRM d o es no th av e t h e fo rce o f l aw, s ee M ark s v . Co m m i s s io ner, 9 4 7 F.2 d9 8 3 , 9 8 6 n .1 (D.C. Ci r. 1 9 9 1 ), aff’ g T.C. M em o . 1 98 9 -5 75 ; Val l o n e v . Co m m is s io n er, 8 8 T.C. 7 9 4 , 8 0 7 -8 0 8 (1 9 87 ). Co n s equ en t l y , we d o n o treg ardth o s e IRM d i rect i v es o r t h e ch aract eri zat i o n o f p et it i o n er’ s cl ai m b as edo n t h o se d i rect i v es as d et erm i n at i v e o f o u r ju ri s di ct i o n.- 1 5 -

an ab us e o f d i s cret i o n , o r o th erwi s e n o ti n acco rd an ce wi th l aw.” Kas p er v . Co m m i s s i o n er, 1 5 0 T.C. 8 , 2 1 (2 0 1 8 ). W e d o n o ts ub st i tu t e o u r ju d g m en tfo r t h at
o f t h e ag en cy

b u ti n s teadco n fi n e o u rs el v es t o en s u ri n g th ati t s d et erm i n at i o n

“ rem ai n ed‘ wi th i n the b ou n d s o f reas o n edd eci s i o n m ak i n g ’ ”. Dep ’ to f Co m m erce
v . New Yo rk , 5 8 8 U.S. _

_ _ , _

_ _ , 1 3 9 S. Ct
. 2 5 5 1, 2 5 6 9 (2 0 19 ) (qu o ti n g Bal t . Gas & El ec. Co . v . Nat . Res . Def. Co u n ci l , In c., 4 6 2 U.S. 8 7 , 1 0 5 (1 9 8 3 )). In th e
co u rs e o f o u r rev i ew, we can n o tco m p el th e IRS t o co m

m en ce an au d ito r t o p ro v id e an ex pl an at i o n o f i t s d eci s io n n o tt o co m m en ce an au d i t . See Co h env . Co m m i s s i o n er, 5 5 0 F. Ap p ’ x 1 0 , 1 1 (D.C. Ci r. 2 0 1 4 ), aff’ g 1 3 9 T.C. 2 99 (2 0 1 2 ); Lewi s v . Co m

m i s si o ner, 1 5 4 T.C. _

_ _ , _

_ _ (s l i p o p . at 2 2 ) (Ap r. 8 , 2 0 2 0). In rev iewi n g a d et erm i n at i o n o f t h e W BO, we g en eral ly co n fi ne o u r rev i ew t o the ad m i n i s trat i v e reco rd . Kas p er v . Co m m i s s i o ner, 1 5 0 T.C. at2 0 ; s ee J am es M ad i s o n Lt d . b y

Hech tv . Lu dwi g , 8 2 F.3 d 1 0 8 5 , 1 0 9 5 (D.C. Ci r. 1 9 96 ) (n o t i n g th atu n d er wel l -s et t ledp ri n ci p l es o f ad m i n i st rat i v e l aw, co u rt s o rd in ari l y co n fi n e th ei r rev iew o f ag en cy d et erm i n at i o n s t o th e ad m i n i s trat i v e reco rdas s ubm i t t edb y th e ag en cy ). Th e ad m i n is trat i ve reco rdi n a wh i s t l eb l ower cas e n o rm al ly i s
ex p ect edt o i ncl u d e “ al l i n fo rm at i o n p ro vi d ed b y th e wh i s t l eb lo wer (wh ether p ro v id edwi th th e wh i s t leb l o wer’ s o ri g i n al s ubm i s s i o n o r t h ro u gh a s ub s equ en t
co n tactwi th the IRS).” Sec. 3 01 .7 6 2 3 -3 (e)(2 )(i ), Pro ced . & Ad m i n . Reg s. Th e- 1 6 -

i n fo rm at i o n th ata wh i st l eb lo wer p ro v i d es t o th e IRS’ o p erat i n g d i v i s i o ns b efo re
s ub m i t t i n g a Fo rm 21 1 t o t h e W BO m ay b e rel ev an tt o th e wh i s t l eb l o w er’ s cl ai m fo r an award . See Wh i s t l eb l ower 2 1 2 7 6 -1 3 W v . Co m m i s s i on er, 1 4 4 T.C. 2 9 0 (2 0 1 5). C. Pet i t i on er’ s M ot i o n To Sup p l em en tth e Reco rd , as Sup p l em en t ed Pet i t i o ner’ s m o t i o n t o s up p l em en tthe reco rd , as s up p lem en t ed , requ es t s th at th e ad m in i s trat i ve reco rdb e “ s up p l em en t ed ” wi th two i t em s : (1 ) t h e 2 0 1 2
s ub m i s si o n an d (2 ) t h e 2 0 1 9 s ub m i s si o n . Anad m i n i s trat i v e reco rdm ay b e “ s up p l em en t ed ” i n o n e o f t wo way s ,

“ ei th er b y (1 ) i n cl u di n g ev i d en ce t h ats h ou l dh av e b een p ro p erl y a p arto f t h e ad m i n is trat i v e reco rdb u twas ex cl u d edb y th e ag en cy , o r (2 ) ad d i n g ex traju d i ci al
ev i d en ce t h atwas n o t in i t i al l y b efo re t h e ag en cy

b u tthe p art y

b el iev es s h o u l d
n o n et h el es s b e i n cl ud edi n th e ad m i ni s trat i v e reco rd .” An i m al Leg al Def. Fu n dv . Vi l s ack , 1 1 0 F. Sup p . 3 d1 57 , 1 6 0 (D.D.C. 2 0 15 ) (qu o ti n g W i l d E art h Gu ard i an s v . Sal azar, 6 7 0 F. Sup p. 2 d1 , 5 n .4 (D.D.C. 2 0 0 9 )). Pet i t i o n er’ s m o ti o n co nfl at es th es e t w o ty

p es o f reco rd“ s up p l em en t at i o n ”: Itreq ues t s th e Co u rtt o i n cl u d e cert ai n o m i t t edev i d en ce i n th e ad m i n i st rat i v e reco rdas wel l as t o rev i ew cert ai n
ev i d en ce t h ati s o u t s i d e o r i n ad d i t i o n t o th e ad m in i s trat iv e reco rd . As d i scu s s ed
m o re fu ll y

b el o w, thes e are s ep arat e t y p es o f requ es ts an ds ubjectt o d i s t in ct- 1 7 -

s t an d ard s . See Ocean a, In c. v . Ro s s , 2 9 0 F. Supp . 3 d 7 3 , 7 8 (D.D.C. 2 0 1 8) (“ [C] o n fu s i o n h as ari s en b ecau s e t h e t erm ‘ s up p l em en t ’ ‘ h as b een u s ed
s yn o n ym o u s l y

t o refer t o b o th a ci rcu m s tan ce i n wh i ch a p art y arg ues th atth e ad m i n is trat i v e reco rdd o es n ot actual l y refl ectth e m at eri al s th at th e ag en cy h ad b efo re i t wh en i tm ad e i t s d eci s i o n , an da ci rcu m st an ce i n wh ich a p arty s eek s t o ad d ex tra-reco rdo r ex tra-ju d ici al i nfo rm at i o n t o th e reco rdth at was co n ced ed l y
n o tb efo re t h e ag en cy .’ ” (q uo t i n g Un i v . o f Co l o. Heal th atM em ’ l Ho sp . v . Bu rwel l, 1 5 1 F. Supp . 3 d1 , 1 3 (D.D.C. 2 0 1 5))); s ee al so Un i v. o f Co l o . Heal th v . Azar, _

_ _ F. Sup p . 3 d

_

_ _ , 2 0 20 W L 1 55 7 1 3 4 , at* 5 (D.D.C. M ar. 3 1 , 2 02 0 ) (d i s cu s s i ng d i fferen ts t an dard s th atap p l y fo r t h e t wo ty

p es o f reco rd

“ s up p l em en t at io n ”); Ocean a, In c. v . Pri t zk er, 2 1 7 F. Sup p . 3 d3 1 0 , 3 1 6 -3 1 7 (D.D.C. 2 0 1 6), aff’ ds ub n o m . Ocean a, In c. v . Ro s s , 9 20 F.3 d 8 5 5 (D.C. Ci r. 2 0 1 9 ). 1 . Requ es tTo In cl ud e Om it t edEv i d en ce i n th e Ad m i n i s trat i v e Reco rd Pet i t i o ner req u es t s th atwe i ncl u d e t h e 2 01 2 s ub m i s s i o n i n t h e ad m i n is trat i v e reco rd . He u rg es th atth e ad m in i s trat i ve reco rd i s i n co m p let e wi th o u tth e 2 0 1 2 s ub m i s s i o n b ecau s e i n fo rm at i o n s ub m i tt edwi th res p ectt o th e cl ai m o n wh ich th i s cas e i s p red i cat edwas “ s up p lem en t al ” t o h i s 2 0 1 2 s ub m i s s i o n
an d al l thes e m at eri al s s ho u l d be co n s i d eredt o g et h er.- 1 8 -

Res p o n d en tco u n ters thatth e 2 0 1 2 s ub m i s si on i s n o tp ro p erl y i n cl u d edi n th e ad m in i s trat i ve reco rdb ecau s e t h e W BO d i d n o tco n s i d er t h e 2 0 12 s ub m i s s i o n i n reject i ng p et i t i o n er’ s cl ai m . Res p o n d en tas s ert s th atp et i t i o n er’ s 2 01 2
s ub m i s si o n was as s o ci at edwi th s i x d i fferen t t ax p ay ers an das s i g n eds i x d i fferen t cl ai m n u m b ers b y th e W BO, wh i ch ev en tu al l y d en i edal l o f t h es e cl ai m s atv ari o u s t i m es fro m

2 0 1 2 t o 2 0 1 5
. Ab s en ta s ub s t an t i al s h o wi n g m ad e wi th cl ear ev i d en ce t o th e co n trary , an ag en cy i s p res um edt o h av e p ro p erl y d es i g n at edth e ad m i n i st rat i v e reco rd . See Ocean a, In c. v . Ro s s , 9 2 0 F.3 dat8 6 5 (“ [T] h e d es i gn at i o n o f t h e Ad m i n i s trat i v e Reco rd , l i k e an y

es t ab l i s h edad m i n i s trat iv e p ro cedu re, i s en t i t l edt o a p res u m p t i o n
o f ad m i n i s trat i v e reg ul ari ty .” (qu o t in g Bar M K Ran ch es v . Yu et t er, 9 9 4 F.2 d7 3 5 , 7 4 0 (1 0t h Ci r. 1 99 3 ))); s ee al s o Lat i f v . Ob am a, 6 7 7 F.3 d1 1 75 , 1 1 7 8 (D.C. Ci r. 2 0 1 1 ) (d es cri b in g the s h o wi n g req u i redt o o v erco m e t h e p res u m p t io n o f reg u l ari t y
as o n e m ad e b y

“ cl ear ev i den ce”); Nat . Res . Def. Co u n ci l, In c. v . Trai n , 5 1 9 F.2 d 2 8 7 , 2 9 1 (D.C. Ci r. 1 9 7 5) (fi n d i n g th atth e p lai n t i ff h adm ad e a “ s ub st an t i al
s h o wi n g ” t h at th e en t i re ad m i n i s trat i v e reco rdh adn o tb een fi l edwi th th e
rev i ewi n g co u rt ). As o n e co u rth as ex pl ai n ed : A co u rts h o u l d g en eral l y

co ns i der n ei th er m o re n o r l es s th anwh at was b efo re t h e ag en cy atth e t im e i tm ad e i t s d eci s io n . Th i s m ean s th e ag en cy

m u s t co m p i l e al l th e i n fo rm at io n i tco n s i d eredd irect l y o r- 1 9 -

i n d i rect l y . Ho wev er, i t is th e res p o ns i b i l it y o f th e d eci di n g ag en cy t o co m p il e t he ad m i n i s trat iv e reco rd , an dth e ag en cy i s p res u m edt o h av e p ro p erl y

d o n e s o . In o rd er fo r a Co u rtt o o rd er s up p l em en t at i o n, the p l ai n t i ff m us t o v erco m e t h is s tro n g p res u m p t i o n o f reg u lari ty

b y p u tt i n g fo rt h co n cret e ev i d en ce t h at th e d o cu m en t s i ts eek s t o ‘ ad d’ t o th e reco rd were act u al l y

b efo re th e d eci s i o n m ak ers . Th ere s h o u l db e n o th i n g co n tro vers i al ab o utth is p ro po s it i o n. If fo r s o m e reas o n, m at eri al s th atwere act u al l y a p art o f t h e ag en cy ’ s reco rdwere n o tp ro p erl y i n cl u d ed , wh et h er b y

d es i g n o r acci d en t, th ey

s h o u l d b e i n cl u dedi n th e reco rdfo r t h e Co urt ’ s rev i ew. Iti s o n ly th e co u rt ’ s d eferen ce t o th e ag en cy ’ s co m

p i l at io n t h atco u n sel s p au s e. If i tcan b e s h own th at th e m at eri al s s o u g h tt o b e i n cl u d ed i n th e reco rdb efo re t h e co u rt , were i n d eedb efo re t h e ag en cy , s up p lem en t at io n i s ap p ro p ri at e. * * * [Ci t at i on s o m i t t ed .] Cap e Hat t eras Acces s Pres . Al l. v . U.S. Dep ’ t o f In teri o r, 6 6 7 F. Sup p. 2 d 1 1 1 , 1 1 4 (D.D.C. 2 0 0 9); s ee al s o Sara Lee Co rp . v . Am . Bak ers As s ’ n , 2 5 2 F.R.D. 3 1 , 3 3
- 3 6 (D.D.C. 2 0 0 8 ). Th e m ere fact th atth e W BO p o s s es s edth e 2 0 1 2 s ub m i s s i o n at th e t im e o f i t s d eci s i o n d o es n o t m ean th atth e 2 0 1 2 s ub m i s s i o n s h o u l dn eces s ari l y b eco m e p arto f t he ad m i n i s trat i v e reco rdi n th i s cas e. See Bu t t e Ct y ., Cal . v . Ch au dh u ri , 8 8 7 F.3 d5 0 1, 5 0 7 (D.C. Ci r. 2 0 1 8 ). If, h o wev er, b efo re t he W BO m ad e i ts d et erm i n at i o n p et i t i o ner b ro u g h tth e 2 0 1 2 s ub m i s s i o n t o th e W BO’ s at t en t i o n wi t h
res p ectt o t h e cl ai m th at i s th e s ub jecto f t h e i n s t an tcas e, t hen th e 2 0 1 2 s ub m i s s i o n- 2 0 -

i s p ro p erl y

p arto f t h e ad m i n i s trat i v e reco rd . See i d .; s ee al s o s ec. 3 01 .7 6 2 3
- 3 (e)(2 )(i ), Pro ced
. & Ad m i n. Reg s Bo th th e Fo rm 2 1 1 th atp et it i on er s ub m i tt ed i n M arch 2 0 1 8 an d M s . St en g l e’ s co ver l et t er referen cedp et i t i o ner’ s 2 0 1 2 s ub m i s s i o n . In d eed , i n
res p o n s e t o th e d i rect i v e “Nam e an d t i t le an d co n tacti n fo rm at i o n o f IRS
em pl o y ees t o wh o m vi o l at i on was fi rs trep o rt ed , i f kn o wn ” p et i t i on er’ s Fo rm 2 1 1
s t at es : “ Wri tt en cl ai m s s ub m i t t edt o IRS W BO, Oct o ber 2 01 2 .” M o reo v er, M s . Grav es ’ cl as s i fi cat i on ch eck l i stm em o ran du m , as i n co rp o rat edi n th e ARM , s t at es : Th e i n fo rm at i o n o b t ai n edi n th is cl ai m i s referen cedt o th e cl ai m an t ’ s o ri g in al cl ai m

(2 0 1 2 -0 0 3 6 5 3 ). Th e o ri g i n al cl ai m was d et erm i nedt o l ack s ub s t an ce. Th e s up p l em en t al i n fo rm at i o n p ro v i d edi n th is cl ai m d o es n o th av e en o u g h i n fo rm at i o n t o s up p ortth e al l eg edv i o l at i o n s . Th es e s t at em en t s, co upl edwi th th e co n t en ts o f p et it i on er’ s Fo rm 2 1 1 , co n st i tu t e a s ub s t an t i al s h owi n g m ad e wi th cl ear ev i d en ce t h at th e 2 0 1 2
s ub m i s si o n i s p ro p erl y

p arto f t h e ad m i n i s trat i v e reco rd . Acco rd i n g l y , we wi l l g ran tp et i t i o n er’ s m o t i o n t o s up p l em en tth e reco rd , as s up p l em en t ed , i n s o far as i t
s eek s t o co m

p let e t he reco rdwi th th e 2 0 1 2 s ub m i ss i o n . 2 . Requ es tt o Perm i tCo n s i d erat i o n o f Ex trareco rdEv i d en ce In as k in g u s t o s up p l em en tth e ad m i n is trat i v e reco rd t o i n cl u d e t h e 2 0 1 9
s ub m i s si o n , p et i t i o ner i s as k i n g u s t o co n si der ev i d en ce t h atwas n o t(an dco u l d- 2 1 -

n o t ) h av e b een b efo re t h e W BO wh en i t m ad e i t s d eci s i o n i n 2 0 1 8. Al th o u g h i ti s
s o m et i m es ap p ro p ri at e t o co n s i d er ex trareco rd i n fo rm at i o n , th i s “ i s th e ex cep t i o n , n o tth e ru l e.” Th eo d o re Ro o s ev el t Co n v ers at i o n P’ s h i p v . Sal azar, 6 1 6 F.3 d4 9 7 , 5 1 4 (D.C. Ci r. 2 0 1 0 ). Th e Co u rt o f Ap p eal s fo r t h e D.C. Ci rcu i th as “ reco g n i zeda
s m al l cl as s o f cas es wh ere d i st ri ctco u rt s [o r, as h ere, t h e Tax Co u rt ] m ay co n s u lt
ex tra-reco rdev i d en ce wh en ‘ th e p ro cedu ral v al i d i ty o f t h e [ag en cy ] ’ s act i on . . . rem ai n s i n s eri ou s qu es t i on ’ ”. Hi l l Derm aceu t i cal s, In c. v . FDA, 7 0 9 F.3 d4 4 , 4 7 (D.C. Ci r. 2 0 1 3 ) (qu ot i n g Es ch v . Yeu t t er, 8 7 6 F.2 d9 7 6 , 9 9 1 (D.C. Ci r. 1 98 9 )). Th atCo u rto f Ap p eal s h as m o s trecen t l y i d en t i fi edth ree ci rcu m s t an ces i n wh i ch
ex trareco rdev i d en ce m ay b e co n s u l t ed : 7

7 In Kas p er v . Co m

m i s si o n er, 1 5 0 T.C. 8 , 2 0 -2 1 (2 01 8 ), we n o t eda l o n g er l i sto f ex cep t io n s as s u m

m ari zedi n Es ch v . Yeu t t er, 8 7 6 F.2 d9 7 6, 9 9 1 (D.C. Ci r. 1 9 8 9 ). Ho wev er, as th e Di s tri ctCo u rtfo r t he Di s tri cto f Co l u m b ia h as recen t l y o b s erv ed : [T] h e “ tren d” i n th e D.C. Ci rcu i th as b een “ t o w ard s l im it i ng th e ci rcu m s t an ces i n wh ich d i s tri ctco u rt s m ay co n s i der ev i den ce o u t s i d e th e ad m i n is trat i ve reco rd [.] ” Un i t edStu d en tAi dFu n d s , In c. v . Dev o s , 2 3 7 F. Sup p . 3 d 1 , 4 (D.D.C. 2 0 1 7 ). In Es ch v . Yeu t t er, 8 7 6 F.2 d9 7 6 (D.C. Ci r. 1 9 8 9 ), th e Ci rcu i treco g n i zedei g h t“ ex cep t i on s co u n t en an ci n g u s e o f ex tra-reco rdev i d en ce.” Id . at 9 91 . Si n ce th en , th e Ci rcu ith as g radu al l y

wi nn o wedth e n u m

b er o f ci rcu m s t an ces i n wh i ch co urt s m ay

co ns i der ex tra-reco rdev i d en ce t o th ree. * * * Ocean a, In c. v . Ro s s , No . 1 7 -CV-8 2 9 (CRC), _

_ _ F. Sup p. 3 d

_

_ _ , 2 0 2 0 W L 1 9 0 5 1 4 8 , at* 3 n .5 (D.D.C. Ap r. 1 7 , 2 0 20 ) (ci ti n g Ci ty o f Dan i a Beach v . FAA,

(co n ti n u ed ...)- 2 2 -

(1 ) i f t h e ag en cy

“ d el i berat el y

o r n eg li g en tl y

ex cl u d edd ocu m en t s that m ay h av e b een ad vers e t o i t s d eci s i o n,” (2 ) i f b ack g ro un d i nfo rm at i o n was n eed ed“ t o det erm i n e wh et h er t h e ag en cy co n s i dered al l th e rel ev an tfact ors ,” o r (3 ) i f t h e “ ag en cy fai l edt o ex p l ai n ad m i ni s trat i v e act i o n s o as t o fru s trat e ju d i ci al rev iew” * * * Ci ty o f Dan i a Beach v . FAA, 6 2 8 F.3 d5 8 1 , 5 9 0 (D.C. Ci r. 2 0 1 0 ) (qu ot i n g Am
. W i ld l an d s v . Kem

p th o rn e, 5 3 0 F.3 d9 9 1 , 1 00 2 (D.C. Ci r. 2 0 0 8 )); J am es M ad i s o n Lt d . b y Hech t , 8 2 F.3 dat 1 0 9 5
. Pet i t i o ner h as n otd em on s trat edth atth e 2 01 9 s ub m i s s i o n m eet s an y s u ch
ex cep t i o n t o th e g en eral ru l e l i m i t i n g o u r rev iew t o th e ad m i n is trat i v e reco rd
. Acco rd in g ly , we wi l l d en y p et it i o n er’ s m o t i o n t o s upp l em en tthe reco rd , as
s up p lem en t ed , i n so far as i t rel at es t o th e 2 0 1 9 s ub m i s s i o n . See Kan s ky v . Co m m i s s i o n er, T.C. M em o . 2 0 2 0 -4 3 , at* 6 -* 7 (d ecl i n i n g t o s up p l em en t the ad m i n is trat i v e reco rdwi th a n ews p ap er art i cl e t h atp o s t -d at edth e W BO’ s d et erm i n at i o n ). In h i s m ot i o n t o s up pl em en tthe reco rd , as s up p l em en t ed , p et i t i o ner al l eg es , wi th o u tm ean i n g fu l s up p o rto r b as i s , i n t en t i o n al an ds y s t em i c effo rt s b y th e W BO t o u n d erm i n e t h e wh i s tl eb l o w er l aws b y wro n g fu l l y s up p res si n g an d d en y i n g

7 (...co n t in u ed ) 6 2 8 F.3 d5 8 1, 5 9 0 (D.C. Ci r. 2 0 1 0 )); s ee al s o Hi l l Derm aceu t i cal s , In c. v . FDA, 7 0 9 F.3 d4 4 , 4 7 (D.C. Ci r. 2 0 1 3 ) (“ Es ch h as b een g i v ena l i m it edi n t erp ret at i o n s i nce i t was d eci d ed [.] ”).- 2 3 -

wh i st l eb l o wer award s . Al tho u g h p et i t i o n er’ s m ot i o n t o s up p l em en tth e reco rd , as
s up p lem en t ed , d o es n o tex p res s l y as ku s t o s upp l em en t th e reco rd wi th an yth i n g
o th er t han th e 2 0 1 2 s ubm is s i o n an d2 0 19 s ubm i s s io n , i ts eem s t o co n t em p l at e d i s co v ery an dev i den t i ary

h eari n g s t o d ev el o p ad di t i o n al ex trareco rdev i d en ce. Fo r i n s t an ce, p et i t i o n er’ s m ot i o n i n d i cat es th att o en ab l e h i m t o p ro v e i n t en t i o n al ab u se o f d i s cret i o n , th e reco rds h o u l di n cl u d e “ s wo rn t es t i m o ny fro m p ers o n s fam i l i ar wi th th e i n t en ti o n s o f t h e W BO m an ag ers ” an dd at a o n “ [r] es p o n d en t ’ s b eh av i o r o v er t i m e” i n s up pres s i n g wh i s t l eb l ower award s. Pet i t i o n er arg u es :

“ Li m i t i n g t h e reco rdt o o n e cas e an dp recl u d i n g s wo rnd ep o s i t io n s b y W BO
em pl o y ees i s p reju di ci al t o p et it i o n er’ s al l eg at i o n o f i n t en t i on al wro n g d o i n g an d
s y s t em at i c u n derm i n in g o f t h e wh i s t l eb l o w er l aws b y Res p o n d en t an d/ o r t h ei r
em pl o y ees .” Th e Sup rem e Co u rth as d ecl aredth at“ wh ere t h ere are ad m i ni s trat i v e fi nd i ng s th atwere m ad e atth e s am e t i m e as th e d eci s i o n * * * th ere m u s tb e a
s tro n g s h o wi n g o f b adfai th o r i m p ro p er b eh av i o r b efo re s u ch i n qu i ry [i nt o t h e
m en t al p ro ces s es o f ad m i n i s trat i v e d eci s i o nm ak ers ] m ay b e m ad e.” Ci t i zen s t o Pres erv e Ov ert o n Park , In c. v . Vo l p e, 4 0 1 U.S. 4 0 2 , 4 2 0 (1 9 7 1) (em p has i s ad d ed ). Pet i t io n er h as fai l edt o m ak e an y s u ch s tro n g s h o wi n g . Hi s al l eg at i o n s are n o t b as edo n an y

m ean i n g fu l d o cu m en t at i o n o r o th er s up p ortb u ti n s teadare b as edo n- 2 4 -

i n feren ces , s p ecu lat i o n , an dco n jectu re. As th e Co u rto f Ap p eal s fo r th e D.C. Ci rcu i th as o bs erv edi n s o m ewh atan al og o us ci rcu m s t an ces : “ Th e eas e wi th wh i ch
accu s at i on s o f i m

pro pri ety can b e m ad e m

u stb e co m

p aredt o th e d i ffi cu l ty

ju d g es
wo u l dface i n v es t i g at i ng s u ch ch arg es ”. Deu km eji an v . Nu cl ear Reg u l at o ry Co m m ’ n , 7 5 1 F.2 d1 28 7 , 1 3 2 8 (D.C. Ci r. 1 98 4 ). W e co n cl u de t h at p et i t i o n er’ s al l eg at i o n s i n th is reg ardl ackth e req u i si t e d eg ree o f s peci fi ci ty t o warran t d i s co v ery o r ev i d en t iary h eari n g s t o s up p l em en tth e reco rd . See i d
. Acco rd i n g l y , i n s o far as p et i t i o n er’ s m o ti o n t o s up p l em en tth e reco rd , as s up p l em en t ed , m i g h tb e th o u g h tt o s eeks up p l em en tat i o n o f t h e reco rdwi th ad d i t i o n al u n s p eci fi ed
ex trareco rdev i d en ce, i twi ll b e d en i ed
. D. Res p o n d en t ’ s M o t i o n fo r Su m m ary J u dg m en t 1 . Su m m ary J ud g m en tSt an d ard Ei th er p art y

m ay m ov e fo r s u m

m ary ju d g m en tupo n al l o r an y p arto f t h e l eg al i ss u es i n co n tro v ers y . Ru l e 1 2 1 (a) an d (b ); Naft el v . Co m m i s s i o n er, 8 5 T.C. 5 2 7 , 5 2 8 -5 2 9 (1 9 85 ). Ord in ari l y , u n d er Ru l e 1 2 1 (b ) t he Co urtm 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 t e as t o an y m at eri al factan da d eci s i o n
m ay b e ren d eredas a m at ter o f l aw. 8 Su n d s tran dCo rp . v . Co m m i ss i o n er, 9 8 T.C.

8 Th e s t an d ardo f rev i ew s et fo rt h i n Ru l e 1 2 1 (b ) i s m o del edaft er t h at co n tai n edi n Fed . R. Ci v . P. 5 6 (a) (fo rm erl y Fed . R. Ci v . P. 5 6 (c)).- 2 5 -

5 1 8 , 5 2 0 (1 9 9 2), aff’ d , 1 7 F.3 d9 6 5 (7 th Ci r. 1 9 9 4 ). Ho wev er, t h i s s u m m ary ju d g m en ts t an d ardi s n o tg en eral l y ap twh ere we m

u stco n fi n e o urs el ves t o th e ad m i n is trat i v e reco rdt 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 i o n . 9

9 As ex p lai n ed i n Stu tt eri n g Fo u n d . o f Am
. v . Sp ri n g er, 4 9 8 F. Sup p. 2 d2 0 3 , 2 0 7 (D.D.C. 2 0 0 7 ):

Un d er Ru l e 5 6 (c) o f t h e Fed eral Ru l es o f Ci v i l Pro cedu re, s u m m ary ju d g m en ti s ap p ro p ri at e wh en th e p l ead i n g s an dth e ev i d en ce d em o n st rat e t h at“ th ere i s n o g en u i n e i s s u e as t o an y m at eri al fact an dth atth e m o vi n g p art y i s en t i t l ed t o ju d gm en tas a m at t er o f l aw.” Fed .R.Ci v .P. 5 6 (c). In a cas e i n v o l v i ng rev i ew o f a fi nal ag en cy

act i o n u n d er t h e Ad m i n i s trat iv e Pro cedu re Act , 5 U.S.C. § 7 0 6 , h o wev er, t h e s t an d ards etfo rt h i n Ru l e 5 6 (c) d o es n o tap p l y b ecau s e o f t h e l im i tedro l e o f a co u rti n rev i ewi n g the ad m i n is trat i v e reco rd . See Si erra Cl ub v . M ai n el l a, 4 5 9 F. Sup p . 2 d7 6, 8 9 -9 0 (D.D.C. 2 0 06 ). Un d er t h e APA, i ti s th e ro l e o f t h e ag en cy t o res o lv e fact u al i s s u es t o arri v e ata d eci s i o n th ati s s up p ort ed b y th e ad m i n i s trat iv e reco rd , wh ereas “ th e fu n ct i o n o f t h e d i s tri ctco u rt i s t o d et erm i ne wh eth er o r n otas a m at t er o f l aw t h e ev id en ce i n th e ad m i n i s trat iv e reco rdp erm i t t edth e ag en cy t o m ak e t h e d eci s i o n i t d i d .” See Occi d en t al En g ’ g Co . v . INS, 7 5 3 F.2 d 7 66 , 7 6 9 -7 70 (9 th Ci r.1 9 8 5 ); s ee al s o No rt h wes tM o t orcy cl e As s ’ n v . U.S. Dep ’ t o f Ag ri c., 1 8 F.3 d1 4 6 8 , 1 4 7 2 (9 th Ci r. 1 9 9 4) (“ [T] h i s cas e i n v ol v es rev i ew o f a fi n al ag en cy

d et erm i n at i o n u n d er t h e [APA] ; th erefo re, res o lu t i o n o f t h [e] m at t er d o es n o treq u ire fact fi n d i n g o n b eh al f o f th i s co u rt . Rat h er, th e co u rt ’ s rev i ew i s l i m i t edt o th e ad m in i s trat iv e reco rd .”). * * * See al s o Green Tech . Grp ., LLC v . Un it ed St at es , 1 47 Fed
. Cl . 2 3 1 , 2 3 9 (2 0 2 0 ) (“ Un l i ke a s umm ary

ju d g m en t p ro ceed i n g, g en u i ne i s s u es o f m at eri al fact wi l l n o t fo recl o s e ju d g m en to n t h e Ad m i n i s trat i v e Reco rd .”) (ci t i n g Ban n u m , In c. v . Un i ted St at es , 4 0 4 F.3 d1 34 6 , 1 3 5 6 (Fed . Ci r. 2 0 05 )); Hu as h an Zh an g v . USCIS, 3 4 4 F. Sup p . 3 d3 2 , 4 5 (D.D.C. 2 0 18 ) (“ [D] ue t o th e l i m i t edro l e o f a co urti n (co n ti n u ed ...)- 2 6 -

Th e p urp o s e o f s u m

m ary ju d g m en ti s t o av o i du n n eces s ary tri al s . Fl a. Peach Co rp . v . Co m m i s s i o n er, 9 0 T.C. 6 7 8, 6 8 1 (1 9 8 8 ). W e d en y a s umm ary

ju d g m en tm o t i o n wh ere t h ere i s a g en u i n e fact ual d i s p u t e t h atreq u i res a t ri al ; b u t i n a “ reco rdru l e” wh i st l eb l o wer cas e t here wi l l n o tb e a t ri al o n th e m eri ts . Ins u ch a cas e i nv o l v i n g
rev i ew o f fi n al ag en cy act i o n u n d er t h e APA, s umm ary ju d g m en ts 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 ag en cy act io n i s
s up p ort edb y

th e 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 i s cret i o n , o r o th erwi s e n o ti n acco rd an ce wi th l aw. See Un i v . M ed . Ct r. o f S. Nev
. v . Sh al al a, 1 73 F.3 d 4 3 8, 4 4 0 n .3 (D.C. Ci r. 1 9 9 9 ) (“ [T] h e qu es ti o n wh et h er
* * * [an ag en cy ] act edi n an arb i traryan dcap ri ci ou s m an n er i s a l eg al o n e wh i ch th e d i s tri ctco u rt[o r, as h ere, t h e Tax Co urt ] can res o l v e o n th e ag en cy reco rd

-- reg ard l es s o f wh et h er i ti s p res en t edi n t he co n t ex t o f a m o t i o n fo r ju d gm en to n th e p l ead i n g s o r i n a m o t i o n fo r s u m m ary ju d g m en t [.] ”); Ct r. fo r Fo o d Safet y v .

9 (...co n t in u ed ) rev i ewi n g th e ad m i n is trat i v e reco rd , th e t y p i cal s u m m ary ju d g m en ts t an d ard s s et fo rt h i n Fed eral Ru l e o f Ci v i l Pro cedu re 5 6 (c) are n otap p l i cab l e.”). Ho wev er, we ev i d en t l y can n o ts ay th atco n v en t i o n al s u m m ary ju dg m en t an al y s is i s n ev er ap p ro p ri at e i n a reco rdru le cas e d eci d ed o n an ab u s e-o f-d i s cret i o n s t an d ard . See As traZen eca Ph arm . LP v . FDA, 7 1 3 F.3 d1 1 3 4, 1 1 3 9 (D.C. Ci r. 2 0 1 3 ) (s t at i n g th ata rev i ewi n g co u rt“ m us t al l o w s u m

m ary ju dg m en t fo r t h e ag en cy ” u n l es s th e p art y ap p eal i n g th e ag en cy

act io n “ can d em o n s trat e b y reco rdev i d en ce t hat‘ a g en ui n e d i s p u t e’ ex i s t s as t o s om e m at eri al facts up p o rt i n g th e p ro p o si t i o n th atthe * * * [ag en cy ’ s ] act i o n s u n d er rev i ew were ‘ arb i trary , cap ri ci o us , an ab u s e o f d i s cret i o n , o r o th erwi s e n o ti n acco rd an ce wi th l aw’ ”).- 2 7 -

Sal azar, 8 9 8 F. Sup p. 2 d1 3 0 , 1 3 8 (D.D.C. 2 0 12 ) (ci t i n g Ri ch ard s v . INS, 5 5 4 F.2 d 1 1 7 3 , 1 1 7 7 & n .2 8 (D.C. Ci r. 1 9 7 7 )). 2 . An al y s i s Th e cen tral p rem i s e o f res p o n d en t ’ s m ot i o n fo r s umm ary ju d g m en ti s th at th e W BO’ s fi n al d et erm in at i o n m u s tb e s u s tai n edb ecau s e, h e s ay s , th is Co u rt ’ s
au th o ri ty u n der s ect i o n 7 6 2 3(b )(4 ) i s l im i t ed t o as cert ai n i n g wh et h er t h e IRS p ro ceed edwi th an act io n an dco l l ect edp ro ceed s as a res u l t o f t h e wh i s t l eb l o wer’ s i n fo rm at i o n . Al th o u g h t h e W BO’ s reject i o n o f a cl ai m n eces s ari ly p recl u des an y
s ub s equ en tad m in i s trat i ve o r ju d i ci al act i o n ag ai n s tan y t ax p ay er an dan y
s ub s equ en tco ll ect i o n o f p ro ceed s fro m th e t ax p ay er b as edo n th e i n fo rm at i o n p ro v id ed , th e W BO’ s reject i on o f a cl ai m d o es n o tp recl ud e ju d i ci al rev i ew. See Laceyv . Co m

m i s s i on er, 1 5 3 T.C. at1 6 1 -1 6 2 . Th i s Co u rth as au th o ri ty t o rev i ew, fo r ab u s e o f d i s cret i o n , th e W BO’ s d eci s i o n t o “ reject ” a cl ai m fo r fai l i ng t o m eet th res ho l dreq u i rem en t s. Id . at1 6 6 -1 6 7
. M o reo v er, as was tru e i n Lacey , th e W BO’ s fi n al d et erm i n at i o n s ai dn o th i n g ab ou t th e p res en ce o r ab s en ce o f

“ ad m i n i s trat iv e act i o n ” o r “ p ro ceed s ” b u t rat h er s t at edth atth e cl ai m was reject ed

“ b ecau s e t he i nfo rm at io n p ro v i d edwas s p ecu l at iv e an d/ o r d idn o t p ro v i d e s p eci fi c
o r cred i b l e i n fo rm at i on reg ard i n g t ax u nd 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 .” Becau s e t ho s e were t he g ro u n d s i n v o k edb y th e ag en cy

(an dn o t- 2 8 -

“ ad m i n i s trat iv e act i o n ” o r “ p ro ceed s ”), t h os e are t h e g ro u n d s we m u s t co ns i d er as
we rev i ew t h e W BO’ s d et erm i n at i on . See i d . at 1 65 (ci t i n g SEC v . Ch en ery Co rp ., 3 3 2 U.S. 1 9 4 , 1 9 6 (1 9 4 7 )). Th e W BO i s ch arg edwi th m ak i n g th e i n i t i al ev al u at i o n o f wh i s t l eb l o wer cl ai m s t o d et erm i n e wh et h er t h ey m eetthe m in i m

u m s t an d ard s fo r an award . See
s ec. 3 0 1.7 6 2 3 -1 (c)(4 ), Pro ced . & Ad m i n . Reg s . Th e t h res h ol d cri t eri a i n cl u d e t h at a cl ai m s h o u l d : • “ co n t ai n s p eci fi c * * * i n fo rm at i on ”; • “ co n t ai n * * * cred i b l e i n fo rm at i on ”; • p ro v i d e “ in fo rm at i o n th atth e wh is tl eb l o wer b el i ev es wi l l l eadt o co l lect ed[t ax ] p ro ceed s ”; • rep o rt“ fai l [u re] t o co m

p l y wi th th e i n t ern al rev en u e l aws ”; • “ id en t i fy

th e p ers o n (s ) b el i ev ed t o h av e fai ledt o co m p ly wi th th e i n t ern al rev en u e l aws ”; • “ pro vi de s ub s t an t iv e i nfo rm at i on , i n cl u d i n g al l av ai l ab l e d o cu m en t at i o n ”; an d
• n o t“p ro v i d e s p ecu lat i v e i n fo rm at i o n ”. See Laceyv . Co m

m i ss i o n er, 1 5 3 T.C. at1 6 0 (quo t i n g s ec. 3 0 1 .7 6 23 -1 (c)(1 ), (4 ), Pro ced
. & Ad m i n . Reg s . ).- 2 9 -

If a cl ai m fai l s t o m eetth o s e cri t eri a, t h en th e W BO m ay s u m m ari l y “ reject ” th e cl ai m wi th o u t fu rt h er co n s i d erat i o n . “ A reject i o n i s a d et erm i n at i o n t h at rel at es s o l el y

t o t h e wh i s t leb l o wer an dth e i n fo rm at i o n o n th e face o f t h e cl ai m th at p ert ai n s t o th e wh i s t l eb l ower.” Sec. 3 0 1
. 7 62 3 -3 (c)(7 ), Pro ced . & Ad m in . Reg s . Th e ad m i ni s trat iv e reco rds h o ws th at th e W BO recei v ed an d rev i ewed p et i t i o n er’ s cl ai m

b efo re fo rward i n g i tt o M s . Grav es , a cl as s i fi er i n LB&I, fo r fu rt her rev i ew. M s . Grav es rev i ewed p et i t io n er’ s cl ai m an dn o t edth ati t referen cedan earl ier 2 0 1 2 s ub m i s s i o n wh i ch h adb een “ d et erm i n edt o l ack
s ub s t an ce. Th e s up p l em en tal i n fo rm at i o n p ro v i d edi n th is cl ai m d o es n o t h av e
en o ug h i n fo rm at i o n t o s up p o rtth e al l eg edv io l at i o n s .” M s . Grav es reco m m en d ed th atp et i t i o n er’ s cl ai m

b e reject edo n th e b as i s th atth e “ [a] l l eg at i o n s are n o t
s p eci fi c, cred i bl e, o r are s p ecu lat i v e--[a] l l eg at i o n s are p u rel y s pecu l at i v e i n
n atu re.” Th e W BO accep t edM s . Grav es ’ reco m m en d at i o n an d i s s u edi t s d et erm i n at i o n reject i n g p et i t i o n er’ s cl ai m b ecau s e “ th e i nfo rm at i o n p ro v i d edwas
s p ecu l at i v e an d/ o r d i dn otp ro v i d e s p eci fi c o r cred i b l e i n fo rm at i o n reg ard i n g t ax- 3 0 -

u n d erp aym en t s o r v i o l at io n s o f i n t ern al rev en ue l aws .” 1 0 W e co n cl ud e t h atth e W BO d i dn o tab u s e i ts d i s cret i o n i n reject i n g p et i ti o n er’ s cl ai m o n th i s rat i o n al e. Th e n arrat i v e at t ach edt o th e Fo rm 2 11 th atp et i t i o ner s ub m i t tedi n 2 0 1 8 al l eg edes s en t ial l y two ty pes o f cl ai m s . Fi rs t , p et i t io n er al l eg edth atth e t arg eth ad
en g ag edi n “ m o n ey l au n deri n g act i v i t i es ” wi th a t h ird -p arty co m p an y that al l eg ed l y ab u s edU.S. Vi rg i n Is l an d s t ax i ncen t i v es . Pet i t i o n er’ s “ m o n ey l au n d eri n g ” cl ai m , h o wev er, i s s p ecu l at i ve i n k ey res p ect s . M o reo ver, i tfai l s t o
m ak e cl ear wh et h er i t m ean s t o s i g n i fy s o m e v io l at i o n o f t h e t ax l aws b y th e t arg et i t sel f (rat h er t han b y

th e t h i rd -p art y

co m p an y o r s om e o th er t ax p ay er) an d
co n seq u en t l y

wh et her t h e i n fo rm at i o n ab o u t th e al l eg ed“ m o n ey l au n d eri n g ”
s ch em e wo u l db e cred ib l y th o u g h tt o l eadt o co l lect i n g t ax p ro ceed s fro m th e t arg eti t s el f (rat h er t h an fro m th e t h i rd -p art y

co m p an y o r s o m e o th er t ax p ay er). Th e g ro u n d s art icu l at edb y th e W BO fo r reject i n g th i s cl ai m are warran t edo n th e b as i s o f t h e i n fo rm at i o n th atp et i t i o n er p ro v i d ed
.

1 0 Th i s Co u rth as p rev i o u s l y fau l t edth is s orto f an d/ o r fo rm u l at i o n as l ack i n g cl ari ty . See, e.g
. , Lacey

v . Co m m i ss i o ner, 1 5 3 T.C. 1 4 6 , 1 7 0 (2 0 1 9 ); Al b er v . Co m m i s s i o n er, T.C. M em o . 2 0 2 0 -2 0 , at* 8 n .5 . Th e reco rdi s cl ear, h o wev er, t h at i n cl as si fy i n g p et i t i o n er’ s cl ai m M s . Grav es ex p l i ci tl y

p rem i s edh er reco m

m en d ed reject i o n o f t h e cl ai m

o n co n cl u s i on s b o th th at h i s al l eg at i o n s were “ p urel y s p ecu l at i v e” an dth at“ th e cl ai m d o es n o th av e en o u g h i n fo rm at i o n t o s up p o rtth e al l eg edv i o l at i on s .” Th e ARM ad o p t ed th es e reco m m en d at i o ns . Acco rd i n g l y we rev i ew wh et h er t h e W BO ab us edi 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 u n d er t h es e rat i o n al es .- 3 1 -

As d i s cu s s edab ov e, we h av e g ran tedp et i t i o n er’ s req u es tt o s up p l em en tth e ad m i n is trat i v e reco rdwi th th e 2 0 1 2 s ub m i s s i o n , wh i ch co n t ai n s ad di t i o n al b ack gro un di n fo rm at i o n ab o u tth e al l eg ed“ m o n ey l au n d eri n g ” act iv i ty . Th es e
m at eri al s , h o wev er, d o n o to v erco m e t h e n o t edi n fi rm i ti es i n p et i t i o n er’ s cl ai m as th ey rel at e t o th e t arg et . Infact , th e 2 0 1 2 s ub m i s s i o n d o es n o t ev en s p eci fi cal l y al l eg e t ax ev as i o n b y

th e t arg etb u tm erel y s tat es th atp et i ti o n er “ wi l l p ro v i d e a fu tu re s up p l em en td et ai li n g * * * [t h e t arg et ’ s ] ro l e i n th e * * * s ch em e o n ce t h e Rel at o r’ s [p et i t i o n er’ s ] l eg al t eam co n cl u des i t s an al y s i s .” In h i s 2 0 1 8 s ub m i s s io n , as fo ret o k en edi n h i s 2 01 2 s ub m i s s i o n , p et i t io n er d i di n fact p ro vi d e s upp l em en t al i n fo rm at i o n ab o utth e t arg et ’ s al l eg ed ro l e i n the al leg eds ch em e. Th e cl as s i fi er
rev i ewedth e m o re co m

p l et e i n fo rm at i o n p ro v i d edi n p et it i on er’ s 2 0 18 s ub m i s s i o n
an d d et erm i n edth ati t fai l edt o p ro v i d e s u ffi ci en ti n fo rm at i o n t o s up p orth i s cl ai m ab o utth e t arg et
. W e fi n d n o ab u s e o f d i scret i o n i n th i s d et erm i n at i o n . 1 1

1 1 Wh ere t h e ad m i n i st rat i v e reco rdi s fo u n dt o b e i n su ffi ci en t , th i s Co u rtm ay rem an d a cas e t o th e W BO fo r reco n s i d erat i o n . See Wh is t l eb l o w er 7 69 -1 6 W v . Co m m i s s i o n er, 1 5 2 T.C. 1 7 2 (2 0 1 9). In th e ci rcu m s t an ces o f t h e i n s t an tcas e, we co n cl u d e th atrem an di s u n n eces s ary an dwo u l d b e u np ro du ct iv e. Ev en i f t h e cl as s ifi er fai ledt o co ns i der t h e 2 0 1 2 s ubm i s s io n i n m ak in g h er d et erm i n at i o n , we b el i ev e t h atan y

erro r i n th i s reg ardwas h arm les s . As n o t ed , th e 2 01 2 s ub m i s s i o n co n tai n s n o s peci fi c al l eg at io n s ab o u tth e t arg etth atwo u l d affect th e cl as s i fi er’ s an al y s i s o r d et erm i n at i o n , as m ad e o n th e b as is o f t h e m o re s p eci fi c al l eg at i o n s p ro v id edi n th e 2 0 1 8 s ub m i s si o n , th atp et i t i o ner’ s “ m on ey l au n d eri n g ” cl ai m s , as th ey rel at e t o th e t arg et , were s p ecu l at i v e. In th es e ci rcu m s tan ces , we d o n o t (co n ti n u ed ...)- 3 2 -

As p arto f h i s wh i s t l eb l o wer cl ai m , p et i t i o ner al s o al l eg edth atth e t arg et i m p ro p erl y d edu ct edi n t eres to n b o rro wedfu nd s th atp et i ti o n er al leg edwere u s ed t o fi n an ce s eco n d ary -m ark et l i fe i n s u ran ce i n v es t m en t s . Pet i t io n er al l eg edth at th es e d edu ct i o n s v i ol at eds ect i o n 2 6 4 an dres u l t edi n t ax u nd erp aym en t s o f n earl y $ 1 b i l l i on . On ce ag ai n, the fact s th atp et i t i o ner al l eg edap p ear s p ecu l at i v e i n k ey
res p ect s . M o reo v er, i t i s b as i cal l y i n d et erm i n at e, o n th e b as i s o f t h e al l eg edfact s , wh et h er t h e t arg etactu al l y v i o lat eds ect i o n 2 6 4, as p et it i on er’ s cl ai m as s ert s . 1 2 Th e g ro u n d s art icu l at edb y th e W BO fo r reject i n g th i s cl ai m are warran t edo n th e b as i s o f t h e i n fo rm at i o n th atp et i t i o n er p ro v i d edt o th e W BO.

1 1 (...co n t i nu ed ) b el i ev e t h atp et i t i o ner was p reju d i cedo r t hati t wo u l d m ak e s en s e t o rem an dth i s cas e t o t h e W BO fo r reco n si d erat i o n o f i t s d et erm i n at i o n i n th e l i g hto f t h e 2 0 1 2 s ub m i s si o n . See PDK Lab s ., In c. v . DEA, 3 6 2 F.3 d7 8 6 , 7 9 9 (D.C. Ci r. 2 00 4 ) (“ If th e ag en cy ’ s m i st ak e d i d n o taffect th e o u t co m e, i f i t d idn o tp reju d ice t h e p et i t i o n er, i two u ldb e s en s el es s t o v acat e an drem an d fo r reco n s id erat i o n .”).

1 2 Sec. 2 6 4(a)(3 ) g en eral l y p ro v i d es thatn o d edu ct i o n i s al l owedfo r am o u n t s p ai do r accru edo n i n d eb t ed n es s i n cu rredt o p urch as e a l ife i n s u ran ce co n tract i f th e d eb twas i n cu rredp u rs uan tt o a p l an o f p urch as e wh i ch co n t em p l at es th e s y s t em at i c b o rro wi ng o f i ncreas es i n th e cas h v al u e o f t h e i ns u ran ce co n tract . Sec. 2 6 4 (a)(3 ) i s i n ap p l i cab l e i f n o p arto f an y fo ur an n u al p rem iu m s du e i n th e fi rs t s ev en -y ear p eri o do f an i n s uran ce co n tracti s fi n an cedb y m ean s o f i n deb t ed n es s . Sec. 2 6 4(c)(1 ). Pet it i o n er’ s al leg at io n s l acks p eci fi c i n fo rm at i o n t o s up p o rta n o n s pecu l at i v e co n cl u s i o n th atth e t arg et ’ s p u rp ort edact i o n s ei th er m eetth e cri t eri a fo r ap p l y i ng th e g en eral ru l e o f s ec. 2 6 4(a)(3 ) o r fal l o u t s i d e th e ex cep t i o n o f s ec. 2 6 4 (c)(1 ).- 3 3 -

3 . W BO’ s Di s cret i o n To Li m i tSco p e o f In v es t i g at i o n s Pet i t i o ner co m

p lai n s th atth e W BO s h o u l dh av e d on e m o re t o i n v es t i g at e h i s cl ai m s . Hi s p et i t i o n as s i g n s as erro r t h at “ i n v i ew o f t h e am o u n to f t ax ev ad edan d
am ou n to f d et ai l i n the cas e, t h e IRS n ev er fo l l o wedup wi th ei th er an i n t erv i ew o f
m e o r m y at t o rn ey , o r wi th an y

o ther m ai l edreq u es t s fo r i n fo rm at i o n .” Th e l aw
ex p res s l y p ro v i d es , h o wev er, t h ati n an al y zi n g i n fo rm at io n recei v edfro m an i n d i v i du al , th e W BO “ i n i t s s o l e d i s cret i o n , m ay as kfo r ad d i t io n al as s is tan ce fro m
s u ch in d i v i du al o r an y

l eg al rep res en t at i v e”. Tax Rel i ef an dHeal th Care Act o f 2 0 0 6 , Pub . L. No
. 1 0 9-4 32 , s ec. 4 0 6 (b )(1 )(C), 1 2 0 St at . at2 9 6 0 (em p has i s ad d ed ). Becau s e th e W BO’ s act io n s i n th i s reg ardare co m m i t t edt o i t s “ so l e d i s cret i o n ”,
an d th e s t atu t e p ro v i d es n o m ean in g fu l s t an d ardb y wh i ch t o ju dg e t h e W BO’ s
ex erci s e o f t h atd i s cret i o n , th o se act i on s are i m m u n e fro m ju d i ci al rev i ew. See 5 U.S.C. s ec. 7 0 1(a)(2 ) (2 0 1 2) (p recl u d i n g ju di ci al rev i ew o f ag en cy act i o n s

“ co m m it t edt o ag en cy

d i s cret i o n b y

l aw”); s ee al s o Heck l er v . Ch an ey , 4 7 0 U.S. 8 2 1 , 8 3 0 (1 9 8 5) (u nd er 5 U.S.C. s ec. 7 0 1(a)(2 ) “ rev i ew i s n o t t o b e h ad ” i n th o s e rare ci rcu m s t an ces wh ere t he rel ev an ts t atu t e “ i s drawns o th ata co u rtwo ul dh av e
n o m ean i n g fu l s t an d ard ag ai ns twh i ch t o ju d ge t h e ag en cy ’ s ex erci s e o f d i s cret i o n ”).- 3 4 -

Si m i l arl y , th e p et it i on as s i g n s as erro r th atp et i t i o ner’ s al l eg at i on s ag ai n s t th e t arg etare “ s o ap p al l in g an dd et ai l ed , th ati n-d ep th co n s i d erat i o n i s warran t ed .” As th is Co urth as ex p l ai n ed , h o wev er:

Iti s n o tt o th e Tax Co u rtb u t t o th e Secret ary o f t h e Treas u ry th atCo n g res s h as g i v en th e au th o ri ty t o “ m ak e t h e i n qui ri es , d et erm i nat i o n s, an das ses s m en t s o f al l t ax es ”, s ec. 6 2 0 1 , an dt o “ co l l ect th e t ax es ”, s ec. 6 3 0 1 . Th e Tax Co u rt h as n o p ract i cal m ean s fo r ev al u at i n g th e IRS’ s au d i tp ri o ri t i es , i t s al lo cat i o n o f i t s au di t res o urces , o r i t s ju d g m en t s ab o u t th e l i k el i h o o do f co l l ect i n g p art i cu l ar l i ab il i t i es . * * * Co n s equ en t l y , “ w e d o n o trev i ew the IRS’ s d eci s i o n wh et h er t o au d i ta t arg eti n res p on s e t o a wh i s t l eb l ower’ s cl ai m

an d* * * we h av e n o au th o ri ty t o req u i re t h e IRS t o ex p lai n a d eci s i o n n o tt o au d i t .” Lacey v . Co m m i s s i o n er, 1 5 3 T.C. at_ _ _ (s l i p o p . at3 0 ). Cl i n e v . Co m

m i s s i o n er, T.C. M em o . 2 0 2 0 -3 5 , at* 1 5 (fn . refs . o m i t t ed ). 4 . Al l eg edPro cedu ral Irreg u l ari ti es In o p p o s i n g res p o n den t ’ s m o ti o n fo r s umm ary ju d g m en t , p et i t i o n er s u g g es ts th atth e IRS i m

p ro p erl y fai l edt o as s i g n a cl ai m n u m b er t o h i s cl ai m

up on recei p t
o f M s . St en g le’ s M arch 1 , 2 0 1 6 , l et t er an dth atthe IRS fai l edt o ch eckwh et h er t h e i n fo rm at i o n p u rp o rt ed l y

s ub m i t t edwi th t h atl et ter h adb een fo rward edt o th e ap p ro p ri at e fi el do ffi ce t o b e act edo n . Th ere i s n o ev i d en ce i n t h e ad m i n i st rat i v e
reco rd , h o wev er, th atth e W BO act u al l y recei v edth e M arch 1 , 2 0 1 6, l et ter b efo re M arch 2 1 , 2 0 1 8 , wh en the W BO recei v edp et i t i o n er’ s Fo rm 2 11 d at edM arch 5 ,- 3 5 -

2 0 1 8
. 1 3 Fu rt h erm ore, ev en i f t he W BO d i drecei v e M s . St en g l e’ s l et t er i n 2 0 1 6 , i t i s u n cl ear wh et h er s h e was au th o ri zedatth att i m e t o rep res en tp et i t i on er i n h i s cl ai m ag ai ns tth e t arg et
. 1 4 As n o t ed , a co p y o f M s . St en g le’ s M arch 1 , 2 01 6 , l et t er
was i n factat t ach edt o p et i t i o n er’ s 2 0 1 8 s ub m i s s i o n , wh i ch was as s i g n eda cl ai m
n u m b er up o n recei p t b y

th e W BO. In an y

ev en t , th ere i s n o ev i d en ce t h at th e IRS
ev er co m m en cedan act i on ag ai n s t , o r co l l ect edp ro ceed s fro m , th e t arg etas a
res u l t o f an y

i n fo rm at i on p et i t i o n er s up pl i ed
. Pet i t i o ner co n ten d s th atcert ai n s t at em en t s i n th e cl as si fi cat i o n ch eck l i s t
m em o ran du m

p rep aredb y

M s . Grav es are co n trad ict o ry . He n o t es th atth e cl as s ifi cat i o n ch eck l i s tm em o ran du m d es cri bes h i s cl ai m

as al l eg i n g th atth e t arg et h ad co n s p i red “ t o ev ad e m i l li o ns i n fed eral an dl o cal t ax es ” (em p h as i s ad d ed ) b u t g o es on t o s tat e t h at“ [t ] h e es t i m at edd o l l ar am o u n t o f t h e t ax l i ab i l it y i s l es s th an

1 3 Th e o nl y

co p y o f th e M arch 1 , 2 0 1 6, l et ter i n th e ad m i n i s trat iv e reco rd i s th e u n si g n edco py

at tach ed t o M s . St en gl e’ s M arch 1 2 , 2 0 18 , l et t er t o the W BO. An dal th o u g h th atco py

o f th e M arch 1 , 2 0 1 6, l et t er al l u d es t o a Fo rm 2 1 1 , th e o n l y Fo rm s 2 1 1 i n th e ad m in i s trat iv e reco rdare t h e Fo rm 2 1 1 s i gn edb y

p et i t i o n er o n M arch 5 , 2 0 1 8 , an dth e Fo rm 2 1 1 , s i g n edb y

p et i t i o n er o n M ay 2 5 , 2 0 1 8 , wh i ch i n d i cat edth ati twas a “ s up p lem en t al s ub m i s s i o n ” t o cl ai m No . 2 0 1 8-0 0 6 8 0 1
. 1 4 Aft er t h e W BO recei v edp et i t io n er’ s Fo rm 2 1 1 d at edM arch 5 , 2 0 18 , i t s en ta l et t er t o M s . St en gl e ad v i s i n g h er t h atb ecau s e s h e h adfai ledt o s ubm i ta v al i dFo rm

2 8 48 , th e W BO was req u i redt o co m m un i cat e d i rect ly

wi th p et it i o n er ab o utth i s cl ai m . Itwas o nl y s ub s equ en tl y

th atM s . St en g l e s ubm i t t ed t o th e W BO a Fo rm 2 8 4 8 , d at edAp ri l 1 3, 2 0 1 8 , au th o ri zi ng h er t o rep res en tp et i t i o n er wi th reg ardt o h is cl ai m

ag ai n s tth e t arg et
.- 3 6 -

$ 2 m i l l i o n ” an d t h atp et i t io n er’ s “ [a] l l eg at i o n s m eet 7 62 3 (a) cri teri a”. Pet i t i o n er
co n ten d s t h atth es e p u rp o rt edi n co n s i s t en ci es s h o w th atres p o nd en t ’ s em p l o y ees
were n eg l i g en tan d ab us edth ei r d i s cret i o n . W e are n o t p ers uad ed
. Acco rd i ng t o th e In t ern al Rev en u e M an u al (IRM ), fo r p u rp os es o f cl as s ify i n g a cl ai m

as ari s i n g u n d er s ect i o n 7 6 2 3 (a) o r (b ), th e wh is tl eb l o wer’ s d es cri p t io n o f t h e am o un to wedb y th e t ax p ay er i s n o td et erm i n at i v e; ev en i f t h e al l eg edam o u n tex ceed s $ 2 m i ll i o n , th e cl ai m i s t o b e co n s i d ereda s ect i o n 7 6 2 3 (a) cl ai m i f “ th e cl ai m

d oes n o ti den t i fy

a s p eci fi c/ cred i b l e t ax i s s u e o r i s p urel y
s p ecu l at i v e i n n atu re.” IRM p t . 2 5 .2 .2 .7 .1 (2 ) (J an . 1 2 , 2 0 1 8 ); cf. Sm i th v . Co m m i s s i o n er, 1 4 8 T.C. 4 4 9 (2 0 1 7) (h ol d in g th atth e “ am ou n t s i n d i s p u t e” referen cedi n the s ect i on 7 62 3(b )(5 )(B) t h res ho l d are t h e t o tal am o un to f th e l i ab i l i ty th atth e Co m

m i s s i o n er p ro p o s edwi th res p ectt o a t ax p ay er’ s ex am i n at i o n th atwas co m

m en cedu s in g the i n fo rm at i o n p ro v id edb y a wh i s t l eb l ower). Hav i n g
co n cl u d ed th at p et i ti o n er’ s cl ai m was “p u rel y s p ecu lat i ve”, t h e cl as s ifi er act edi n
acco rd an ce wi th IRM d i rect i ves i n treat i n g th e p ro ceed s i n d is p u te as i n v o l v i n g l es s th an$ 2 m i l l i o n, s o as t o b e ch aract eri zed as a cl ai m ari s i n g u n d er s ect i o n 7 6 2 3 (a). 1 5 Co n s equ en tl y , we co n cl u d e t h atth e cl as s i fi er d i dn o tactarb i trari l y i n

1 5 As d i s cu s s eds up ra n ot e 6 , th e IRM l ack s th e fo rce o f l aw fo r p urp o s es o f d et erm i n i n g , fo r ju ri s d i ct io nal p u rp o s es , wh et h er p et i t i o n er’ s cl ai m was p ro p erl y (co n ti n u ed ...)- 3 7 -

th i s reg ard . Inan y ev en t, an y erro r i n th is reg ardwas h arm l es s , as we h av e t reat ed p et i t i o n er’ s cl ai m

as ari s i n g u n d er s ect i on 7 6 2 3(b ) fo r p urp o s es o f o u r rev i ew. 5 . W BO Di rect or’ s Red el eg at i o n Au th o ri ty In h i s rep ly

t o res po n d en t ’ s res p o n se t o p et i t i o n er’ s m o ti on t o s up p l em en t th e reco rd , as s up p l em en t ed , p et i t i o n er arg u es fo r t h e fi rs tt i m e t h at th e W BO Di rect o r i m

p ro p erl y red el eg at edh i s au th o ri ty t o an al y ze p et i t i o ner’ s i nfo rm at i o n . Un d er Del eg at i o n Ord er 2 5 -7 (Rev . 3 ), IRM p t . 1 .2 .2
. 1 4.7 (8 ) (J u l y 1 4 , 2 0 1 6 ), th e Co m m i s s i o n er h as d el eg at edt o th e Di rect o r o f t h e W BO t h e au th ori ty “ to recei v e,
an al y ze, an das s ig n i nfo rm at i o n p urs u an tt o IRC § 7 6 2 3”. Th i s d el eg at i o n o rd er g o es on t o s tat e: “ Th i s au tho ri ty t o recei v e an das s i g n i s red el eg at edt o em p l o y ee
o f t h e In i t i al Cl ai m s Ev al u at i o n u n i t .” Id . p t . 1 .2 .2 .1 4 .7 (1 1 ). Pet i t i o n er s u g g es t s th atb ecau s e t he p o wer t o “ an al y ze” i n fo rm at i o n i s ex p res s l y l i s t edi n p owers d el eg at edt o th e Di rect o r o f t h e W BO b uti s o m i t t edfro m th e l is to f p o w ers th at
m ay b e red el eg at ed , o n l y

th e Di rect o r i s au th o ri zed t o “ an al y ze” wh i s t l eb l o wer i n fo rm at i o n . He arg u es th atb ecau s e res p o n d en t h as n o tal l eg ed , an dth e reco rd

1 5 (...co n t i nu ed ) ch aract eri zedas ari s in g u n d er s ec. 7 6 2 3 (a). W e fi n dth e IRM d i rect i v es i n s tru ct i v e, h owev er, i n s h o wi n g th atthe cl as si fi er act edi n acco rd an ce wi th es t ab l i s h edIRS d i rect iv es .- 3 8 -

d o es no tes t ab l i s h , “ an y d i rect an al yti cal i n vo l v em en to f t h e Di rect o r o f t h e W BO i n the cu rren tcl ai m ”, the W BO’ s reject i o n o f h i s cl ai m was p ro cedu ral l y

d efect i v e. W e fi n dn o m eri t i n p et i t i o n er’ s arg u m en t . Th e au th o ri ty t o “ an al y ze” i n fo rm at i o n i s i m

p l i ci ti n th e au th o ri ty

t o “ recei v e an das si g n ” i n fo rm at i o n : Th ere
wo u l db e n o p oi n ti n t h e Di rect o r’ s as s i g n i n g i n fo rm at i o n , o r i n t h e reci p i en t ’ s recei v i ng i t , i f t h e reci p i en tl ack edth e au th o ri ty t o an al y ze i tb u t co u l do n l y
reas si g n i tt o s o m eo n e el s e, wh o l i k ewi s e wo u l d l ackau th o ri ty t o an al y ze i t , an d
s o o n adi n fi n i tu m . Al th o u g h th e d el eg at i o n o rd er m ay b e i n art fu l l y draft ed , i ti s cl ear en o u g h , we th i nk , th ati n referri n g t o “ [t ] h i s au th o ri ty ” (em p h as i s ad d ed ), th e d el eg at i on o rd er refers i n s h o rt h an d fas h io n t o the p rev i o u s l y d es cri b edau th o ri t y

“ t o recei v e, an al y ze, an das s i g n i n fo rm at i on ”. Th ere i s n o req u i rem en tth atth e W BO Di rect o r p ers o n al ly an al y ze al l wh is tl eb l o wer i n fo rm at i o n . E. Co n cl u s i on In co n cl u s i o n , th e W BO’ s reject i o n o f P’ s cl ai m i s s up p ort edb y

th e ad m i n is trat i v e reco rd , as co m p l et ed , an d was n o t arb i trary , cap ri ci o u s , o r an ab u s e
o f d i s cret i o n . Acco rd i n g l y , we wi l l g ran t res p on d en t ’ s m o t i o n fo r s u m m ary ju d g m en t
.- 3 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 ered
.