The usual Friday no-decision day at Tax Court, so here’s an order keeping two whistleblowers’ names shrouded in secrecy, Anonymous 1 and Anonymous 2, Docket No. 12472-11W, Judge Foley drawing the veil.

Need I add that in a separate order Judge Foley gives the whistleblowers nothing, because IRS claims they got no money out of the equally anonymous Company X? Of course, the Anonymous Duo allege IRS started its own proceedings after blowing them off, but Judge Foley ducks that one, because the statute says “no cash to IRS, no cash to whistleblower”, and Tax Court has no jurisdiction to look behind IRS’ statement.

The Anonymous Duo are ex-employees of Company X. They fear retaliation, stigma and inability to find future employment, if it becomes known that they blew the whistle.

Judge Foley: “Petitioners contend that revealing their identity will result in professional stigma and will prevent them from obtaining employment in the future….

“In general, trial courts balance a number of factors to determine whether litigants should be allowed to proceed anonymously, including. (1) social interests; (2) whether the case involves highly sensitive personal information; (3) whether disclosure of the party’s identity will pose a credible risk of physical harm; (4) whether disclosing the party’s identity will cause “other significant harm” (e.g., professional stigma or economic retaliation); and (5) whether the party is a confidential informant. See Whistleblower 14106-10W v. Commissioner, 137 T.C. 183, 195-203 (2011). Tax whistleblowers are especially vulnerable to professional stigma, retaliation, and economic duress. See id. at 203.

“In determining whether a whistleblower may proceed anonymously, the Court must consider whether the need for anonymity outweighs the prejudice to the opposing party and the general presumption that the parties’ identities are public information. See id. at 192. Anonymity for whistleblowers is specifically contemplated by Rule 345(b) which became effective July 6, 2012.

“Petitioners have demonstrated that they are of an age and station in life which necessitates continued employment and that revealing their identity would harm their future employment prospects. See id. at 203. The fact that petitioners are no longer employed by Company X does not immunize petitioners from possible retaliation. See id. at 204. Petitioners have demonstrated that the risk of harm to them exceeds mere embarrassment or annoyance. See id. In addition, respondent [IRS] knows petitioners’ identity and will not be prejudiced if they proceed anonymously.” Order, at pp. 1-2.

Of course, having now been permitted to proceed anonymously, the Anonymous Duo are permitted to proceed out the Tax Court door, as IRS gets summary judgment.

I know it’s a waste of time asking Congress to do anything; they can’t stop the country from falling off the fiscal cliff they created, much less clean up the whistleblower provisions of the Internal Revenue Code. But this charade really has to stop.