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Tax Court Rules that WBO's Refusal of Whistleblower's Request for Assistance is Immune from Review whistleblowers-sm.png

09 / 26 / 2020

Van Bemmelen v. IRS, 155 T. C. No. 4 (8/27/2020)

In recent cases, the Tax Court has focused on whether it has jurisdiction to review the decisions reached by the IRS Whistleblower Office, and in particular classifiers, or the analysts in the operating divisions of the IRS (SB/SE or LBI).  Decisions reached as to whether or not to reject a claim for failure to meet certain criteria are governed by the Tax Court's decision in Lacey v. IRS, 153 T.C. 146, 166-169 (2019).  In that case, the Tax Court held that it DOES have jurisdiction to review, for abuse of discretion, a determination made by the Whistleblower Office itself, to REJECT a whistleblower claim.  Such review is to be confined to the administrative record, under application of the so-called record rule (subject to Kaspar).  In other words, if the administrative record shows that the IRS Whistleblower Office properly rejected a Form 211 because he did not provide any credible information regarding a tax law violation, and that the determination has been made, based on the recommendations of classifiers within the operating divisions, the determination will be sustained.  See, e.g., Friedal v. IRS, T.C. Memo 2020-131; Damiani v. IRS, T.C.Memo 2020-132 (9/17/2020)(refusing to consider Forms 211 filed as against alleged participants who were German persons/entities, with respect to which the classifiers determined had no nexus to the United States or the Federal tax laws, and merely suggesting that a failure to file certain forms did not meet the statutory criteria).

In Van Bemmelen, the Tax Court specifically noted that the Whistleblower Office has absolute immunity from review of the exercise of its discretion in deciding whether to accept an offer of additional assistance by the Whistleblower or the Whistleblower's attorney. 


Before blowing the whistle on a perceived tax scheme or tax evasion, potential whistleblowers need to carefully consider the IRS rules and current policies with respect to the reporting of the same.  Far too often, whistleblowers anticipate prompt payment of a reward, or assume that there are adequate protections under the law, ensuring confidentiality.  Whistleblowers can face retaliation, intimidation or worse.  If the whistleblower is not familiar with IRS Form 211 and how the Whistleblower Office at the IRS addresses applications on Form 211, they can miss out on critical aspects of the process or how to improve their submission.  It is strongly advised that whistleblowers seek out qualified legal assistance to advise them with regard to any such submission.  Mr. Tufts can be reached at 407-647-7887 with regard to any whistleblower issue.