Opinion
19730-22W
03-30-2023
SUZANNE JEAN MCCRORY, Petitioner v. COMMISSIONER OF INTERNAL REVENUE, Respondent
ORDER
Emin Toro Judge.
This whistleblower case was assigned to the undersigned judge on February 10, 2023. Now before the Court is respondent's Motion to Dismiss for Lack of Jurisdiction (Doc. 10) with accompanying Exhibits. Petitioner opposes the Motion.
According to respondent's Motion, the Final Award Decision Under Section 7623(a) ("Award Letter") upon which this case is based addressed seven different claim numbers consolidated by the IRS Whistleblower Office (2018-012740, 2018-012741, 2018-012742, 2018-012743, 2018-012744, 2018-012745, and 2018-012746). Respondent alleges in his Motion that the Whistleblower Office rejected five of those claims (2018-012740, 2018-012741, 2018-012742, 2018-012743, and 2018-012744) because the allegations made by petitioner "were not specific, credible, or were speculative" and denied one of the claims (2018-012746) because "the target [taxpayer] was not contacted, no audit or examination ensued and . . . no proceeds were collected." Resp't's Mot. to Dismiss ¶¶ 5, 7. Respondent's Motion alleges that only one of the seven claim numbers (2018-012745) resulted in an award under section 7623. We note, however, that the Award Letter issued to petitioner does not distinguish between the seven claim numbers and does not indicate that any claims were rejected or denied.
The relevant jurisdictional provision in a whistleblower case is section 7623(b) (4). It provides that "[a]ny determination regarding an award under [section 7623(b)] (1), (2), or (3) may . . . be appealed to the Tax Court (and the Tax Court shall have jurisdiction with respect to such matter)." I.R.C. § 7623(b)(4).
In Li v. Commissioner, 22 F.4th 1014, 1017 (D.C. Cir. 2022), the United States Court of Appeals for the District of Columbia Circuit held that we do not have jurisdiction to review the WBO's threshold rejection of a whistleblower claim. The D.C. Circuit reasoned that the WBO makes an award determination "under [section 7623](b)(1)" when the IRS actually proceeds with an action based on a whistleblower's information. Id. In the case of a rejection, the WBO rejects the whistleblower's claim at the threshold, without the IRS's ever taking action against the target taxpayer. Id. Therefore, the D.C. Circuit concluded, the WBO's decision to reject a claim is not an award determination under section 7623(b)(1), (2), or (3), and the Tax Court does not have jurisdiction to review that decision under section 7623(b)(4). Id. ("The WBO did not forward Li's Form 211 to an IRS examiner for further action, and the IRS did not take any action against the target taxpayer. There was no proceeding and thus no 'award determination' by the IRS for Li's whistleblower information. Therefore, the Tax Court had no jurisdiction to review the WBO's threshold rejection of Li's Form 211."); see also Whistleblower 972-17W v. Commissioner, No. 972-17W, 159 T.C., slip op. at 5-10 (July 13, 2022) (discussing and applying Li).
To aid in the Court's consideration of respondent's Motion, we seek the parties' views on (1) whether the seven claims apparently consolidated by the Whistleblower Office should be considered together or separately for purposes of determining our jurisdiction in this case, and (2) if the latter, whether this case should be dismissed for lack of jurisdiction insofar as it relates to the six claim numbers respondent alleges were either rejected or denied on the grounds that the IRS did not proceed with "any administrative or judicial action" against the target taxpayers under section 7623(b) (1). Accordingly, it is hereby
ORDERED that, on or before May 1, 2023, the parties shall file a response to this Order. The response shall include the parties' views on the topics outlined above and anything else the parties believe would be useful to the Court in considering those topics.