In Part I, we looked at how the U.S. Tax Court sustained an IRS rejection of a whistleblower claim relating to a foreign citizen who apparently was born in the U.S. The Tax Court, apparently without IRS objection, concluded that it had subject matter jurisdiction to review IRS rejections of whistleblower claims like those in Whistleblower 15977-18W v. Commissioner, which are based on the IRS conclusion that the claim provided no “‘specific and credible’ information about a federal tax issue or non-compliance.” Such information is required to avoid rejection under Treasury Regulation Section 301.7623-1(c)(4). The Tax Court then stated it would grant the IRS summary judgment on that IRS rejection if the IRS conclusion of the lack of “specific and credible” evidence is supported by the administrative record, is in accordance with law, and is not arbitrary, capricious, or an abuse of discretion.

Somewhat inexplicably, the Tax Court focused solely on the whistleblower’s allegations of the target’s U.S. citizenship. The Tax Court did not focus on whether the whistleblower’s statements as to the target’s assets would fail...

Read Full Story: https://news.bloombergtax.com/daily-tax-report/can-the-whistle-be-blown-again...