The U.S. Court of Appeals for the D.C. Circuit (which hears all appeals from U.S. Tax Court cases involving whistleblowers) issued a recent decision in the case of Li v. Commissioner of Internal Revenue; No. 20-1245 (D.C. Cir. 2022) that highlights when it makes sense for a tax whistleblower to go to Tax Court.
As background, I have represented a number of tax whistleblowers successfully in tax court – most notably in the cases of 11332-13W v. CIR, 142 TC 21 (2014) and (with co-counsel Stephen M. Kohn) the landmark victory for tax whistleblowers in 21276-13W v. CIR, 147 TC 4 (2016), where it was determined that criminal fines and civil forfeitures are considered “collected proceeds” when calculating an award).
In the case of Li, the Appellate Court narrowed when a whistleblower may appeal to Tax Court a denial from the IRS whistleblower office. In the facts of Li – the whistleblower’s filing was knocked out right from the beginning with the IRS Whistleblower Office reviewer finding that the whistleblower’s allegations were “speculative and/or did not provide specific or credible information regarding tax underpayments . . .” The whistleblower’s filing was not forwarded to the field and instead a denial letter was sent to the whistleblower.
The Li Court, in short, placed two requirements for a whistleblower before the Tax Court would have jurisdiction to hear a whistleblower case:
News, Editor's Desk Pressure continues to mount on the Jewellers Association of Australia (JAA) concerning its relationship with jewellery industry suppliers and wholesalers. Last month, Jeweller r...