Tax Court In Brief | Lewis v. Commissioner | Appealable Determination Of Whistleblower Award

• Published date: 16 May 2022
• Subject Matter: Employment and HR, Litigation, Mediation & Arbitration, Tax, Trials & Appeals & Compensation, Income Tax, Whistleblowing
• Law Firm: Freeman Law
• Author: Freeman Law

The Tax Court in Brief - May 9th - May 13th, 2022

Freeman Law's "The Tax Court in Brief" covers every substantive Tax Court opinion, providing a weekly brief of its decisions in clear, concise prose.

For a link to our podcast covering the Tax Court in Brief, download here or check out other episodes of The Freeman Law Project.

Tax Litigation: The Week of May 9th, 2022, through May 13th, 2022

• Rogerson v. Commissioner, TC Memo. 2022-49| May 12, 2022 | Toro, J. | Dkt No. 5848-20
• Jackson v. Comm'r, T.C. Memo. 2022-50 | May 12 2022 | Vasquez, J. | Dkt. No. 19634-18L
• Evert v. Comm'r, T.C. Memo. 2022-48| May 9 2022?| Marshall, A | Dkt. No 12901-19
• Harrison v. Comm'r, T.C. Memo 2022-6 | May 12, 2022 | Panuthos J | Dkt. No. 12170-19S

Lewis v. Commissioner, TC Memo. 2022-47| May 9, 2022 | Greaves, J. | Dkt. No. 10007-20W

Opinion

Summary: Timothy J. Lewis submitted Form 211, Application for Award for Original Information, to the IRS's Whistleblower Office (WBO) alleging underpayments in income tax by a closely held corporation. The WBO sent a letter to Lewis, stating that Lewis was entitled to a "mandatory" whistleblower award under 26 U.S.C. ' 7623(b). The letter specified the total amount of the award and stated that, in accordance with law, the award would automatically be reduced by what is referred to as a sequestration reduction. Lewis appealed the final determination letter to the Tax Court and argued that it was inappropriate for the WBO to apply the sequestration reduction to the award. The Tax Court upheld the sequestration reduction. The WBO then issued Lewis a whistleblower award check, which included the applicable sequestration reduction. Lewis thereafter again petitioned the Tax Court, challenging the appropriateness of the sequestration reduction and arguing that the award check constitutes a section 7623(b)(4) "determination" that confers jurisdiction on the Tax Court. The IRS disagreed, contending that the Court lacks jurisdiction to adjudicate Lewis's petition.

Key Issue:

• Whether the Tax Court has jurisdiction to adjudicate Lewis's challenge to the sequestration reduction applied to the whistleblower award check delivered to him?

Primary Holdings:

• No. An award check can be an appealable determination in certain circumstances, but this is not one of those instances. The WBO issued petitioner the award check for the claims pursuant to the terms of the final determination letter, which the Tax Court upheld in the initial...