On January 10, the U.S. Court of Appeals for the District of Columbia Circuit released a decision in the Internal Revenue Service (IRS) whistleblower case Lissack v. Commissioner. The case had drawn the attention of whistleblower advocates who assessed the ruling as a mixed bag for whistleblowers.
The case concerns whistleblower Michael Lissack who blew the whistle on improper tax deductions made by a condominium development corporation. His disclosure led to the collection of $60 million in unpaid taxes. The IRS Whistleblower Office denied Lissack’s whistleblower award claim on the basis that his disclosure did not allege the specific violations which the IRS took action on. Lissack appealed the denial to the Tax Court, which upheld the denial. The D.C. Circuit then affirmed the Tax Court decision, writing that “a whistleblower whose information may have ‘substantially contributed’ to a fruitless action against a person is not entitled to share proceeds from a distinct action against that same person that did not draw on the whistleblower’s information.”
However, both the Tax Court decision and D.C. Circuit decision cited the Supreme Court’s 1984 decision in Chevron v. Natural Resources Defense Council in ruling that the IRS regulation which served as the basis of the award denial was a reasonable interpretation of the statute. On July 2, in light of the landmark Loper Bright decision, the U.S. Supreme Court vacated the D.C. Circuit ruling and remanded the case back to...
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