NWC Submits amicus Brief in D.C. Circuit Whistleblower Case Supporting "de novo" review for IRS cases.

Published on April 26, 2022

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NWC Submits Amicus Brief in D.C. Circuit Whistleblower Case

WASHINGTON, D.C. | APRIL 26, 2022 — National Whistleblower Center filed an amicus brief in the United States Court of Appeals for the D.C. Circuit in a case concerning the denial of a whistleblower award under the Internal Revenue Service’s (IRS) Whistleblower Program. NWC was joined by Zerbe, Miller, Fingeret, Frank & Jadav LLP and Kohn, Kohn & Colapinto, LLP in filing the brief. The case, Lissack v. Commissioner, deals with a whistleblower who reported improper tax deductions made by a condominium development corporation. The whistleblower’s tip ultimately led to the collection of $60 million in unpaid taxes. However, the IRS denied the whistleblower’s claim for an award on the grounds that the tip was unrelated to the specific violation uncovered by the IRS investigators.

The whistleblower appealed the denial to the United States Tax Court, which has jurisdiction over whistleblower claims. Tax Court upheld the denial of the award, and the whistleblower is now appealing that decision to the D.C. Circuit.

The amicus brief submitted by NWC argues that the Tax Court applied an incorrect standard of review for decisions made by the IRS Whistleblower Office when it based its denial on the “arbitrary and capricious” rather than “de novo” standard. As NWC argued in its amicus filing, “a review of the statute through its legislative history and relevant context leaves no doubt that the meaning of the words in the statute’s text when adopted by Congress meant to provide for de novo review for [whistleblower award] claims.” For this reason, NWC writes in support of reversing the denial and revisiting the case applying the appropriate de novo standard.

NWC believes that it is critical to have effective oversight by federal courts of decisions made by the IRS that affect the important contributions of whistleblowers who report tax violations. The de novo standard is a critical element in the success of the IRS Whistleblower Program because it creates certainty and independent oversight, ensuring that whistleblowers have a fair chance to contest IRS decisions. “It is certainly not an overstatement to say that the future success of the IRS Whistleblower Program is in the hands of [the D.C. Circuit]. To allow the IRS to have full discretion over the decision-making process for rewarding these whistleblowers without appropriate judicial review would result in an inevitable chilling effect on the IRS Whistleblower Program,” NWC argued.

NWC will continue using every avenue available to advocate for whistleblowers who bring corruption and unlawful conduct to light and urges the D.C. Circuit to side with whistleblowers and set a precedent that will encourage more reporting to continue the success of this powerful program.

NWC is a 501(c)(3) non-profit organization and efforts like this amicus brief are made possible by our generous supporters. Please donate today to support our continued whistleblower advocacy.

NWC’s Georgetown Litigation Fellow, Ben Falstein, was instrumental in the drafting and filing of the brief and NWC Executive Director Siri Nelson is available for comment.

For more information, contact NWC at info@whistleblowers.org.

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