Professional Tax Research Solutions from the Founder of Kleinrock. tax research
Parkers Tax Library
Accounting News Tax Analysts professional tax research software Like us on Facebook Follow us on Twitter View our profile on LinkedIn Find us on Pinterest
CPA software
Professional Tax Software
tax and accounting
Tax Research Articles Tax Research Parker's Tax Research Articles Accounting Research CPA Client Letters Tax Research Software Client Testimonials Tax Research Software tax research

Accounting Software for Accountants, CPA, Bookeepers, and Enrolled Agents

CPA Tax Software



Tax Court Has Jurisdiction to Review Whistleblower Awards.
(Parker Tax Publishing July 3, 2014)

The Tax Court has jurisdiction to review the IRS's whistleblower claim award determinations where the whistleblower provided information both before and after the enactment of the Tax Relief and Health Care Act of 2006. Whistleblower 11332-13W v. Comm'r, 142 T.C. No. 21 (6/4/14).

An unnamed taxpayer (Whistleblower W) reported a tax fraud scheme, involving W's employer and related entities, to the government. W provided the government with information regarding the tax fraud scheme from June 2006 through the fall of 2009. W's information formed the basis of the government's action against the target taxpayers. W filed a Form 211, Application for Award for Original Information, in 2008 and submitted to the IRS documentary evidence related to W's involvement in the government's investigation. W resubmitted Form 211 in 2011 seeking an award under Code Sec. 7623(b). Shortly thereafter, the government settled with one of the target taxpayers and recovered more than $30 million dollars in taxes, penalties and interest. The IRS granted W a discretionary award determination under Code Sec. 7623(a) and denied W's request for an award under Code Sec. 7623(b).

In cases where expenses are not otherwise provided for by law, the IRS is authorized under Code Sec. 7623(a) to pay such sums as it deems necessary for: (1) detecting underpayments of tax, or (2) detecting and bringing to trial and punishment persons guilty of violating the internal revenue laws or conniving at the same. Because the discretionary whistleblower awards were seen as arbitrary and inconsistent and because of a lack of standardized procedures and limited managerial oversight with respect to those awards, Congress enacted the Tax Relief and Health Care Act of 2006 (TRHCA). The TRHCA enacted Code Sec. 7623(b) which requires the IRS to pay nondiscretionary whistleblower awards under certain circumstances and to provide the Tax Court with jurisdiction to review such award determinations. The effective date of Code Sec. 7623(b) is December 20, 2006. Under Code Sec. 7623(b), a whistleblower is entitled to a minimum nondiscretionary award of 15 percent of the collected proceeds if the IRS proceeds with administrative or judicial action using information provided in a whistleblower claim. Any amount payable under this rule is paid from the proceeds of amounts collected by reason of the information provided, and any amount so collected must be available for such payments.

W filed a petition seeking a review of the IRS's award determination. The IRS filed a motion to dismiss for lack of jurisdiction, arguing that the Tax Court lacked jurisdiction to review the IRS's award determination because the IRS proceeded against the target taxpayers using information W provided before the effective date of Code Sec. 7623(b). W opposed the IRS's motion on the grounds that W provided information to the government both before and after the effective date of Code Sec. 7623(b).

The Tax Court held that it has jurisdiction to review the IRS's whistleblower claim award determinations where W alleged that information was provided to the IRS before and after the effective date of Code Sec. 7623(b). The Tax Court further held that W satisfied its pleading burden by alleging facts that the IRS proceeded with an action against the target taxpayers using information brought to the IRS's attention by W both before and after the effective date of Code Sec. 7623(b).

For a discussion of the rules relating to whistleblower awards, see Parker Tax ¶262,300. (Staff Editor Parker Tax Publishing)

Disclaimer: This publication does not, and is not intended to, provide legal, tax or accounting advice, and readers should consult their tax advisors concerning the application of tax laws to their particular situations. This analysis is not tax advice and is not intended or written to be used, and cannot be used, for purposes of avoiding tax penalties that may be imposed on any taxpayer. The information contained herein is general in nature and based on authorities that are subject to change. Parker Tax Publishing guarantees neither the accuracy nor completeness of any information and is not responsible for any errors or omissions, or for results obtained by others as a result of reliance upon such information. Parker Tax Publishing assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect information contained herein.

Parker's Tax Library - An Affordable Professional Tax Research Solution.

Professional tax research

We hope you find our professional tax research articles comprehensive and informative. Parker's Tax Library gives you unlimited online access all of our past Biweekly Tax Bulletins, 22 volumes of expert analysis, 250 Client Letters, Bob Jennings Practice Aids, time saving election statements and our comprehensive, fully updated primary source library.

Parker Tax Research

Try Our Easy, Powerful Search Engine

A Professional Tax Research Solution that gives you instant access to 22 volumes of expert analysis and 185,000 authoritative source documents. But having access won’t help if you can’t quickly and easily find the materials that answer your questions. That’s where Parker’s search engine – and it’s uncanny knack for finding the right documents – comes into play

Things that take half a dozen steps in other products take two steps in ours. Search results come up instantly and browsing them is a cinch. So is linking from Parker’s analysis to practice aids and cited primary source documents. Parker’s powerful, user-friendly search engine ensures that you quickly find what you need every time you visit Our Tax Research Library.

Parker Tax Research Library

Dear Tax Professional,

My name is James Levey, and a few years back I founded a company named Kleinrock Publishing. I started Kleinrock out of frustration with the prohibitively high prices and difficult search engines of BNA, CCH, and RIA tax research products ... kind of reminiscent of the situation practitioners face today.

Now that Kleinrock has disappeared into CCH, prices are soaring again and ease-of-use has fallen by the wayside. The needs of smaller firms and sole practitioners are simply not being met.

To address the problem, I’ve partnered with a group of highly talented tax writers to create Parker Tax Publishing ... a company dedicated to the idea that comprehensive, authoritative tax information service can be both easy-to-use and highly affordable.

Our product, the Parker's Tax Library, is breathtaking in its scope. Check out the contents listing to the left to get a sense of all the valuable material you'll have access to when you subscribe.

Or better yet, take a minute to sign yourself up for a free trial, so you can experience first-hand just how easy it is to get results with the Pro Library!


James Levey

Parker's Tax Library - An Affordable Professional Tax Research Solution.

    ®2012-2018 Parker Tax Publishing. Use of content subject to Website Terms and Conditions.

IRS Codes and Regs
Tax Court Cases IRS guidance