John R. Dee, 167 T. C. 1, filed 7/2/26, got his whistleblowing info to IRS a month after they had finished auditing Target (the taxpayer, not the store), and had their agreed audit report undergoing internal review. John’s info related to three (count ’em, three) items in Target’s year at issue return, of which two resulted in no change and a $2 million deficiency in the third. But all this had been resolved and agreed to before John’s info got to Ogden. So Ogden bounced John’s Form 211.

John petitions and wants to put in additional extra-record evidence. Judge Nega undertakes the obligatory jurisdictional review.

“Under Li and Kennedy, the Court lacks jurisdiction over a petition relating to a whistleblower’s claim if that claim is rejected at the threshold (Li) or forwarded to an examination team and no examination occurs (Kennedy). Then under Estate of Insinga v. Commissioner, 149 F.4th at 718, the Court has jurisdiction over a petition relating to a whistleblower’s claim if that claim is forwarded to an active or open examination, regardless of whether action was taken based on the whistleblower’s claim. See Lissack v. Commissioner, 125 F.4th at 255 (holding that the Court has jurisdiction when the IRS ‘proceeds with’ an action under section 7623(b)(1)).” 167 T. C. 1, at p. 6.

But what happens after the audit is over? Insinga seems to say that once audit is done, there’s nothing to review. But Judge Nega says that’s a false bright line. Until anything taxpayer owed is paid, a lot can happen, and blower info could help rake in the cash.

Happily, Rev. Proc. 2005-32, § 4.01, 2005-1 C.B. 1206, defines what is a “closed case.” And this case isn’t “closed,” because internal review hadn’t yet concluded and no Section 7121 closing agreement had been signed. And if “unagreed,” assessment hadn’t yet occurred, so the case is definitely not closed.

Now before my ultrasophisticated readers cry out as one “So what?! Since when has Tax Court been bound by a Rev. Proc, even before Loper Bright?” Judge Nega says Rev. Proc.s still provide useful guidance.

John’s additional evidence wasn’t before Exam, and his memo of a purported phonecon with a WBO Analyst is neither necessary background information, nor deliberately or negligently excluded from the record, and it does not indicate a failure to fully explain the WBO’s actions so as to frustrate judicial review. 167 T. C.1, at p. 11.

Denial of award sustained.

Long-time Tax Court observers snap up judicial conundra, admiring the intellectual sinuosities that befuddle counsel and make them yearn for any off-ramp they can sell the client. Judge James S. (“Big Jim”) Halpern is no slouch in that department, so trusty attorneys for both IRS and Todd A. Govig & April M. McGrath et al., Docket No. 22991-22, filed 7/1/26, can consider their July Fourth weekend ruined by the nine (count ’em, nine) pages of conundra Judge Big Jim bestows upon them.

After telling them to brief a Loper Bright attack on the SDLIA reg (Reg Section 1.61-22(d)(2)(ii)), he sends them down a briefing rabbit hole via Section 83(h) and Section 419, telling them to emerge with QinetiQ Holdings, Inc. & Subsidiaries firmly within their grasp.

For the QinetiQ backstory, see my blogposts “Truth or Forfeits,” 7/22/15, and “Unbonded,” 10/30/18.

Oh, and of course trusty attorneys may brief anything else they think is to the point.

Taishoff offers this translation from the Halpernese: “Settle this case, guys. If y’all keep this up, y’all will not like the opinion you will make me write.”

It’s such a cliché, but this is one on which I am prepared to wager an ale or two at Jake’s Saloon that you can’t make this stuff up. But let Judge Nega tell the story of Rosie K. Boparai, Docket No. 7789-25, filed 6/30/26.

“Petitioner’s tax return for 2019 was due (after the granting of an extension) on October 15, 2020. Petitioner did not file her 2019 return by that date. 

“On July 17, 2023, petitioner appeared in person at the Sacramento Taxpayer Assistance Center and attempted to hand-deliver her 2019 tax return. Respondent’s employees refused to accept her hand-delivered return without petitioner having first made an appointment for that purpose. That same day, petitioner sent an envelope containing her 2019 return that requested a refund and a check for $10,000 by certified mail to a no-longer-operated Internal Revenue Service (IRS) P.O. Box in San Francisco, California. She included the check despite claiming a refund on the return because she believed that the inclusion of a check would speed up the processing of the return.” Order, at p. 1.

Of course Section 7502 doesn’t help, because the mailpiece was misaddressed.  See Section 7502(a)(2)(B); see also Reg Section 301.7502-1(c)(1)(i). Had Rosie filed properly in 2023, she would have gotten the refund (IRS conceded the deficiency). The 2019 1040 instructions said for overdue returns, use the latest address, and the SF PO Box wasn’t it. 

“Had she consulted the instructions for tax year 2019 with the degree of detail that she claims, she would have seen the directive instructing her to refer to the tax year 2022 instructions to find the proper address for mailing her return.” Order, at pp. 3-4.

PS- IRS finally got Rosie’s return last May.