This article examines the decision in Tom Prescott v. Commissioner of Internal Revenue, T.C. Memo. 2025-121 (2025), focusing on the technical requirements for establishing a mandatory whistleblower award under Internal Revenue Code (I.R.C.) section 7623(b) and the corresponding Treasury Regulations. The case hinges on whether the information provided by the petitioner "substantially contributed" to the resulting administrative action and collection of proceeds, especially in the context of multiple independent whistleblower claims.
The petitioner, Tom Prescott, filed Form 211, Application for Award for Original Information, with the IRS Whistleblower Office (WBO) in April 2013. His claim targeted Target A, a foreign financial institution, and numerous U.S. citizens (Targets B through V) who allegedly held undisclosed accounts with Target A. Prescott claimed he initially provided this information to the Department of Justice (DOJ) Tax Division on January 31, 2013.
Critically, the IRS Criminal Investigation division (CI) had commenced its investigation of Target A much earlier, in October 2010, based on information supplied by taxpayers participating in the Offshore Voluntary Disclosure Initiative (OVDI) program. CI formalized a Subject Criminal Investigation of Target A on December 15, 2010. By the time Prescott submitted his claim in April 2013, the investigation team had already uncovered substantial documentation through the execution of...
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