Thursday, November 1, 2012

Denial of Whistleblower Award Not Subject to Review - U.S. Tax Court.

On an issue of first impression, the U.S. Tax Court held that the whistleblower statute does not provide relief to a taxpayer who has been denied an award where the Internal Revenue Service did not initiate an administrative or judicial action and collecting proceeding (Cohen v. Commissioner, T.C., No.26925-11W, 139 T.C. No. 12, 10/9/12).  

RaymondCohen was a certified public accountant. He provided the IRS whistleblower information that petitioner believed to be actionable on Form 211, concerning information that he believed showed that a public corporation was holding unclaimed proceeds from uncashed dividend checks and unredeemed bonds and not reporting the unclaimed property to the state comptroller as required by State Law and that the more than $700 million in unclaimed assets represented unreported income for Federal Income Tax purposes. 

The IRS notified Mr. Cohen that the matter had been assigned to his Whistleblower Office in Ogden, Utah. The Whistleblower Office evaluated the claim to determine whether an investigation was warranted and an award was appropriate. A few weeks later the Whistleblower Office informed Mr. Cohen that he was not eligible for an award because no proceeds were collected.  

Mr. Cohen requested the Whistleblower Office to reconsider the claim. The Whistleblower Office reiterated the denial, noting that the claim was based on publicly available information. Mr. Cohen filed a petition to this Tax Court to review thai denial.

If you have Tax Problem, contact the Tax Lawyers at Marini & Associates, P.A. for a FREE Tax Consultation at or or Toll Free at 888-8TaxAid (888 882-9243).


1 comment:

  1. Cohen got nothing because the IRS collected nothing. Also the material submitted by Cohen was a matter of public record. In general TP can seek relief from the Tax Court if:
    -the IRS collects the money
    -the data relied on was not a matter of public record
    Sec 7633(b) 4 and 5 allows for tax court review if:
    -claimant's gross income exceeds $200,000 for the year of the action
    -the amount in dispute exceeds $2,000,000.

    Robert S. Blumenfeld, Esq.