DocketNumber: Docket No. 10683-13W.
Citation Numbers: 145 T.C. 204, 2015 U.S. Tax Ct. LEXIS 38, 145 T.C. No. 8
Judges: HALPERN
Filed Date: 9/16/2015
Status: Precedential
Modified Date: 11/21/2020
An appropriate order will be issued.
This is a so-called whistleblower case brought pursuant to
1.
2.
*204 HALPERN,
Petitioners filed a whistleblower claim with the Internal Revenue Service (IRS) in 2006, in which they informed the IRS of a tax evasion scheme (TES) carried out by*39 a specific *205 target corporation (target). Petitioners allege that the information they provided resulted in the IRS (1) investigating certain transactions of the target and (2) initially disallowing the TES. The IRS issued a legal memorandum for general distribution stating that all transactions similar to the TES should not be respected. Petitioners allege that the information they provided led to the issuing of that legal memorandum. With respect to the target, however, they allege that the IRS later reversed course and respected the target's use of the TES. They further allege that the allowance of the TES was part of a larger compromise in which the target agreed to over $50 million of tax adjustments. They also allege that they informed the IRS about a sham debt obligation of the target that was related to the TES. The target claimed an over $20 million loss deduction related to the debt obligation, and petitioners believe the IRS later disallowed that deduction.
The motions seek information as to who within the IRS reviewed the information petitioners provided, information about the IRS investigation into the TES, information about the publishing of the legal memorandum, information*40 related to the IRS investigation into the sham debt obligation, and information related to the amount of collected proceeds. In particular, the motions identify responses to interrogatories 1-6 and document requests 1-5 and 14-16 as either unsatisfactory or not produced by respondent.
In the responses, respondent does not deny any of petitioners' factual allegations. Specifically respondent does not deny that he investigated the target and its use of the TES or that his investigation was the result of petitioners' information. Nor does he deny that there may have been a "compromise" involving numerous issues including the TES that led to the collection of over $50 million. Similarly, he does not deny the disallowance of the loss deduction related to the sham debt obligation.
As stated, respondent*42 does not deny petitioners' factual allegations, nor does he argue that the information sought would be irrelevant to the questions of whether there were collections of proceeds and whether those collections were attributable to petitioners' information. Rather, his relevance objection is based solely on a generalized view that our scope of review should be limited to the "administrative record" and the information petitioners seek is outside that record. Respondent's argument is not a sufficient basis to deny petitioners' discovery requests. Even were we to agree with respondent as to the scope of review, he cannot unilaterally decide what constitutes an administrative record.
We do not have before us a situation where petitioners want information or want us to review information that was not before the agency*44 at the time it made its decision.
Cognizant of the importance of the confidentiality concerns and disclosure restrictions embodied in 1. Respondent shall designate any documents or other information provided to petitioners and containing returns, return information, or taxpayer return information (all as defined in 2. Any person receiving confidential information shall use such confidential information solely for the bona fide purpose of conducting this litigation and not for any other purpose whatsoever. Any failure to comply may expose a person to sanctions and punishment in the nature of contempt. 3. Any confidential information shall not be disclosed directly or indirectly by either petitioners or petitioners' counsel to any person except for the sole purpose of trial preparation and in accordance with the provisions of the protective order. 4. When providing confidential information to other persons for trial preparation, petitioners and their counsel must provide a copy of this order to the person receiving confidential information and inform the person that he or she must comply with the terms of the order. Before providing confidential information, petitioners and their counsel shall obtain the person's signature on a copy of the order, followed by a business or home address of that person at which service of process can generally be made during business hours. Petitioners*46 and their counsel shall retain the signed copy of the order until one year after the decision in this case becomes final. 5. Petitioners, petitioners' counsel, and any other persons who receive confidential information shall, when the resolution of this case becomes final within the meaning of
1. All section references are to the Internal Revenue Code of 1986, as amended and in effect at all relevant times, and all Rule references are to the Tax Court Rules of Practice and Procedure.↩
2.
Asarco, Inc. v. U. S. Environmental Protection Agency , 616 F.2d 1153 ( 1980 )
Blaine P. Thompson v. United States Department of Labor , 885 F.2d 551 ( 1989 )
Federal Power Commission v. Transcontinental Gas Pipe Line ... , 96 S. Ct. 579 ( 1976 )
Tenneco Oil Co. v. Department of Energy , 475 F. Supp. 299 ( 1979 )
Ad Hoc Metals Coalition v. Whitman , 227 F. Supp. 2d 134 ( 2002 )
Whistleblower 14376-16W v. Commissioner , 2017 T.C. Memo. 181 ( 2017 )
Awad v. Comm'r , 113 T.C.M. 1485 ( 2017 )
Kenneth William Kasper v. Commissioner , 150 T.C. No. 2 ( 2018 )
Whistleblower 22716-13W v. Comm'r , 146 T.C. 84 ( 2016 )