Opinion
36014-21W
08-22-2023
MARIA CLAUDIA ESTORGE, Petitioner v. COMMISSIONER OF INTERNAL REVENUE, Respondent
ORDER
Courtney D. Jones Judge
Pending before the Court in this whistleblower case are respondent's Motion to Dismiss for Lack of Jurisdiction and petitioner's Motion to Compel Production of Documents. (Docs. 13, 27). The Court held a hearing on respondent's motion on April 3, 2023, in San Francisco, California.
At the hearing, each party appeared and was heard. Petitioner testified under oath. Respondent acknowledged that the Internal Revenue Service (IRS) examined the target taxpayer and collected proceeds. According to respondent, IRS transcripts show that the IRS examined the taxpayer because of an internal IRS metric-the discriminant index function (DIF) score-related to the taxpayer's 2016 tax year. Petitioner insists that the exam was prompted by the information she provided to the IRS Whistleblower Office (WBO).
After the Court heard the motion, we ordered respondent to advise the Court of respondent's position on our jurisdiction in view of (1) respondent's representations at the hearing that the IRS examined and collected proceeds from the target taxpayer and (2) the judgment (or status of the proceedings) of the U.S. Court of Appeals for the District of Columbia Circuit in Lissack v. Commissioner (No. 21-1268). In Status Reports dated May 10 and July 11, 2023, respondent reported that his position was unchanged. Petitioner filed her motion on July 11, 2023. For the reasons discussed below, we will hold both motions in abeyance.
Jurisdiction
Section 7623(b)(4) gives the Tax Court jurisdiction to hear appeals of "[a]ny determination regarding an award" under the mandatory whistleblower award rules of section 7623(b)(1)-(3). In Li v. Commissioner, 22 F.4th 1014 (D.C. Cir. 2022), the D.C. Circuit interpreted section 7623(b)(1) to provide that "an award determination by the IRS arises only when the IRS 'proceeds with any administrative or judicial action described in subsection (a) based on information brought to the Secretary's attention by [the whistleblower] . . . .'" Li, 22 F.4th at 1017 (quoting § 7623(b)(1)) (alteration in original; emphasis in original).
Unless otherwise indicated, all statutory references are to the Internal Revenue Code, Title 26 U.S.C., in effect at all relevant times, all regulatory references are to the Code of Federal Regulations, Title 26 (Treas. Reg.), in effect at all relevant times, and all Rule references are to the Tax Court Rules of Practice and Procedure.
Appeals of our decisions in whistleblower cases normally lie to the U.S. Court of Appeals for the D.C. Circuit. See § 7482(b) (flush language). Therefore, in these cases we generally follow all on-point precedents of the D.C. Circuit. See, e.g., Golsen v. Commissioner, 54 T.C. 742, 757 (1970), aff'd, 445 F.2d 985 (10th Cir. 1971).
The D.C. Circuit recently had occasion to consider Li's scope. In Lissack v. Commissioner, 68 F.4th 1312 (D.C. Cir. 2023), aff'g 157 T.C. 63 (2021), the D.C. Circuit held that our Court has jurisdiction over a whistleblower case if the IRS proceeds with an action related to the whistleblower's information, even if the WBO ultimately determines that the whistleblower is not entitled to an award. See Lissack v. Commissioner, 68 F.4th at 1321 ("The fact that the IRS conducted an examination here suffices to distinguish Lissack's case from Li."); see also Whistleblower 972-17W v. Commissioner, 159 T.C., slip op. at 3-6 (July 13, 2022) (reaching the same conclusion on similar facts).
"Of course, we always have jurisdiction to determine whether we have jurisdiction." Whistleblower 972-17W, 159 T.C., slip op. at 3. Our jurisdiction is neither expanded nor contracted by the positions of the parties and is a question that we decide. Whistleblower 21276-13W v. Commissioner, 155 T.C. 21, 26-27 (2020) (citing Ringo v. Commissioner, 143 T.C. 297, 299 (2014)). The Supreme Court has held where, as here, "there is no statutory direction for procedure upon an issue of jurisdiction, the mode of its determination is left to the trial court." Gibbs v. Buck, 307 U.S. 66, 71-72 (1939); see also Estate of Gudie v. Commissioner, 137 T.C. 165, 169 (2011). Moreover, when an issue of jurisdiction is raised, either by a party or on our own initiative, we "may inquire by affidavits or otherwise, into the facts as they exist." Estate of Gudie, 137 T.C. at 169 (quoting Land v. Dollar, 330 U.S. 731, 735 n.4 (1947) overruled by implication on other grounds by Larson v. Domestic & Foreign Commerce Corp., 337 U.S. 682 (1949) and citing Stevens v. Redwing, 146 F.3d 538 (8th Cir. 1998)).
At this juncture, the Court believes that review of the entire administrative record will aid in our determination of whether we have jurisdiction. See Estate of Gudie, 137 T.C. at 169 (noting that when jurisdiction is raised, we may inquire by affidavits or otherwise, into the facts as they exist). As in Lissack, respondent acknowledges that the IRS examined the target taxpayer and collected proceeds. The critical question here is whether the exam was based upon the information petitioner provided. See Lissack, 68 F.4th at 1321 (stating that referral and examination count as the IRS "'proceed[ing] with' an 'administrative action' that was 'based on' the information Lissack brought to the Secretary's attention").
Based on the limited materials that are currently before the Court, and in the absence of the entire administrative record, it is unclear whether the exam sprang from petitioner's claim (as she insists) or the IRS's DIF score (respondent's story). To determine whether we have jurisdiction, we will need to resolve this factual dispute.To assist in that determination, we will direct the parties to file a stipulated administrative record.
In Li, the D.C. Circuit stated that because Ms. Li did not argue that the IRS proceeded based on information in her Form 211, the D.C. Circuit did not have occasion to decide whether the Tax Court would have jurisdiction to hear a whistleblower's claim in a case in which the IRS wrongly denied a claim but nevertheless proceeded against a target taxpayer based on the provided information. See Li, 22 F.4th 1017 at n.2; see also Lissack, 68 F.4th at 1320-21. Obviously, petitioner in the instant case alleges that the IRS proceeded based on her information.
Because it is not clear at this juncture whether we have jurisdiction, we will hold petitioner's motion in abeyance.
In view of the foregoing, it is
ORDERED that respondent's Motion to Dismiss for Lack of Jurisdiction (Doc. 13) is held in abeyance. It is further
ORDERED that petitioner's Motion to Compel Production of Documents (Doc. 27) is held in abeyance. It is further
ORDERED that, on or before November 21, 2023, the parties shall file with the Court the entire administrative record stipulated as to its genuineness and completeness. It is further
ORDERED that, if the parties are unable to stipulate to the contents of the administrative record, on or before December 21, 2023, respondent must file with the Court and serve on petitioner the record which, in respondent's view, constitutes the entire administrative record in this case, appropriately certified as to its genuineness and completeness. It is further
ORDERED that, if petitioner contends that the administrative record is incomplete or should be supplemented, petitioner shall move to complete or supplement the administrative record no later than January 20, 2024. Such motion shall allege with as much specificity as possible any factual disputes concerning the contents or completeness of the administrative record and attach any documents petitioner asserts should be added to the administrative record.
Petitioner is reminded of the free legal help available through the following clinics:
The Justice and Diversity Center of the Bar Association of San Francisco
301 Battery Street, 3rd Floor
San Francisco, CA 94111
(415) 782-8978 litc@sfbar.org
Chinese Newcomers Service Center
777 Stockton Street, #104
San Francisco, CA 94108
(415) 421-2111
UC Law San Francisco
200 McAllister Street
San Francisco, CA 94102
(415) 703-8287
Elevate Community Center
www.elevatecommunitycenter.org
(408) 357-9538
info@elevatecommunitycenter.org