Extra Ticket to Tax Court for Whistleblowers

Can a whistleblower get a second opportunity to appeal the IRS’ determination of award in whistleblower claims?

The U.S. Tax Court correctly says yes, if certain conditions are in place. See Whistleblower 15488-17W v. Commissioner (T.C. Memo. 2019-23).

Relevant Facts:

  1. January 28, 2014, Petitioner filed a Whistleblower Claim alleging that the taxpayer failed to recognize discharge of indebtedness income for tax year 2012.

  2. September 29, 2016, IRS Whistleblower Office sent Petitioner a determination letter denying his whistleblower claim, allegedly because while IRS reviewed Petitioner’s allegations and it failed to cause the IRS to take an action.

  3. Petitioner did not file a petition with the Tax Court during the 30 day appeal period.

  4. March 2017, Petitioner reviewed the taxpayer’s SEC filings and learned that during the third quarter of 2016, the taxpayer filed amended tax returns and made a payment in excess of $50 million to the IRS.  The SEC filing also indicated that the tax years 2012 and subsequent years were subject to an IRS examination.

  5. April 7, 2017, Petitioner filed a second whistleblower claim with respect to the same taxpayer and same tax violation.  Petitioner also claimed that the prior rejection by the IRS was pre-mature, and that an award should have been paid to Petitioner.  Petitioner enclosed SEC filing information to support his allegations.

  6. June 15, 2017, IRS Whistleblower Office sent petitioner a letter stating that it had received the claim for reconsideration and stated that the claim was previously denied and attached a copy of prior determination letter.

  7. Petitioner filed a petition on July 17, 2017 seeking review of the second letter.


Court determined that the second letter issued to the Petitioner was a determination letter sufficient to confer jurisdiction upon the Court.

Tax Court is a Court of Limited Jurisdiction:

The United States Tax Court is a court of limited jurisdiction, meaning it can only hear cases which Congress has authorized it may hear. See Internal Revenue Code (“I.R.C.”) § 7442. The Court also cannot expand its jurisdiction beyond what is statutorily provided.

For Whistleblower cases, I.R.C. § 7623(b)(4) provides that “a whistleblower may appeal any determination within 30 days of the determination to the United States Tax Court.”

To determine whether the Court may hear this case, the Court must determine whether IRS made a determination regarding an award when the IRS issued the second letter.

Court’s prior rulings:

  1. Cooper v. Comm’r, 135 T.C. 70, 75 (2010) – name or label of a document does not control whether the document is a determination.  

  2. Comparini v. Comm’r, 143 T.C. 274, 277 (2014) – Court held that a subsequent letter constituted a determination because the subsequent letter for the first time referred to a determination made on that claim and did not indicate further administrative procedures available to the petitioners.  The Court also felt that a significant fact was that the whistleblower supplemented the claim with additional information which the Whistleblower Office considered.  The Judges felt that the additional information made a new, additional or supplemental claim, and the Office’s determination should be treated as a new determination concerning that claim.

  3. Myers v. Comm’r, 148 T.C. 438, 444 (2017) – Whistleblower received a determination on March 13, 2013 but continued to provide additional information regarding his claim.  The IRS Whistleblower Office issue 4 letters between November 2013 and March 2014.  One of the four letters had language substantially similar to Comparini (i.e., IRS considered the additional information and the claim still does not meet criteria for an award).  Another letter had the same language stating that IRS closed the whistleblower’s claim for award and attached a letter reflecting the closing of the file.   The Court held that each of the five letters was a separate appeal determination under I.R.C. § 7623(b)(4).

Court’s Reasoning:

Court concluded that in form the second letter did not make a new determination because it simply attached a copy of the prior determination letter.  However, in substance, because the second letter denied an award based on the reasoning of the first letter, the Court reasoned that the IRS whistleblower Office must have also concluded that the additional allegations were not related to the initial filing and made a determination on the additional information.  The Court also stated that the second letter was hard to distinguish from the additional letters IRS issued in Comparini and Myers, which were held to be determinations.

Significance to Whistleblower:

It is possible to revive the appeal window for a whistleblower claim that has been rejected.  To achieve this second ticket to Tax Court, the whistleblower must provide additional new information for which the IRS whistleblower office must make a determination.  Then and only then, will the Court entertain an appeal of a previously denied whistleblower claim. 

If you are considering an appeal of a determination of your whistleblower claim, please contact the attorneys at Tax Whistleblower Law Firm to consider your options, and to ensure that you have not missed your Tax Court petition filing window.

Author, SHINE LIN strives to present a balanced yet focused claim which allows the IRS to concentrate on the key facts, legal issues, law and legal analysis so that the IRS may successfully pursue the alleged wrongdoers.