Individual Failed to Meet Requirements for Whistleblower Award (Cooper III, TC)

An attorney who submitted two Forms 211, Application for Award for Original Information, claiming that certain parties had failed to pay millions of dollars in estate and generation-skipping transfer tax failed to meet the requirements under Code Sec. 7623 to obtain a whistleblower award. The IRS’s Whistleblower Office reviewed the information provided by the attorney and concluded that no administrative or judicial action would be taken against the taxpayer.

While the Tax Court had jurisdiction to hear the attorney’s request to review the IRS’s denial of his whistleblower claim, its jurisdiction did not extend to opening a judicial or administrative action to determine the tax liability at issue. Whistleblower awards are preconditioned on the IRS’s proceeding with an administrative or judicial action; if the IRS does not proceed, there can be no whistleblower award. Moreover, the IRS properly processed the whistleblower claims but did not collect any amount of tax, interest or penalty from the taxpayer based on the attorney’s information. Because a whistleblower award is calculated as a percentage of collected proceeds, if the IRS does not collect any proceeds there can be no whistleblower award.

W.P. Cooper III, 136 TC –No. 30, Dec. 58,665

Other References:

Code Sec. 7623

CCH Reference – 2011FED ¶42,957.30

Tax Research Consultant

CCH Reference – TRC IRS: 63,060.05


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