Attorney-at-Law

THE FLIP SIDE

In Uncategorized on 09/16/2015 at 23:16

Every record has two sides, says Judge Halpern, so Whistleblower One 10683-13W, Whistleblower Two 10683-13W, and Whistleblower Three 10683-13W, starring in 145 T. C. 8, filed 9/16/15, get to find out what should be in the record.

The Whistleblowers 1-2-3 want answers to interrogatories and production of documents.

“Respondent [IRS] has filed virtually identical responses (responses) to each motion, his sole objection being that the information requested is not contained within his Whistleblower Office’s case file (a purported ‘administrative record’) and, therefore, is beyond the scope of discovery.” 145 T. C. 8, at p. 2.

IRS agrees that the info supplied by Whistleblowers 1-2-3 led to recovery of tax money. Looks like IRS agrees that Whistleblowers 1-2-3 are in the money.

“Rule 70 governs discovery, and paragraph (b) thereof provides that the scope of discovery is ‘any matter not privileged and which is relevant to the subject matter involved in the pending case.’ The paragraph further provides: ‘It is not ground for objection that the information or response sought will be inadmissible at the trial, if that information or response appears reasonably calculated to lead to discovery of admissible evidence’. The standard of relevancy in a discovery action is liberal. The information and responses petitioners seek are clearly relevant to petitioners’ theory of their case: They are looking for evidence that will prove that one or more collections of proceeds from the target were attributable to the information petitioners provided.” 145 T.C. 8, at p. 5. (Citation omitted).

Nor does IRS claim the stuff sought by Whistleblowers 1-2-3 is irrelevant to whether IRS got money, and whether they got it as the result of the info that Whistleblowers 1-2-3 provided.

“Rather, his relevance objection is based solely on a generalized view that our scope of review should be limited to the ‘administrative record’ and the information petitioners seek is outside that record. Respondent’s argument is not a sufficient basis to deny petitioners’ discovery requests. Even were we to agree with respondent as to the scope of review, he cannot unilaterally decide what constitutes an administrative record. How could evidence related to whether there was a collection of proceeds and whether that collection was attributable to the whistleblower’s information not be part of any purported administrative record? Any such evidence goes to the very basic factual inquiries required by section 7623(b). Respondent’s lack of direct response to petitioners’ motions appears to indicate that the current ‘administrative record’ is incomplete.” 145 T.C. 8, at pp. 5-6. (Citations and footnote omitted).

The footnote is instructive, however, so here it is.

“Sec. 301.7623-3, Proced. & Admin. Regs., is entitled ‘Whistleblower administrative proceedings and appeals of award determinations.’ Para. (e) thereof is headed ‘Administrative record’ and states in pertinent part: ‘The administrative record comprises all information contained in the administrative claim file’. Para. (e)(2) thereof describes the content of the administrative claim file. Para. (f) thereof states that the ‘rule’ (section) is effective on August 12, 2014. Neither party mentions the section, and we assume that it is not in effect with respect to petitioners’ claim. In any event, we do not purport to interpret the term ‘administrative record’ as used in sec. 301.7623-3, Proced. & Admin. Regs.” 145 T. C. 8, at p. 6, footnote 2.

The Court can’t accept IRS’ “trust me, trust me” as to the scope of review. If Whistleblowers 1-2-3 claim that stuff is missing, let IRS show that everything relevant put before IRS has been included in the administrative record.

“We do not have before us a situation where petitioners want information or want us to review information that was not before the agency at the time it made its decision. Nor are we considering a situation where relevant evidence may still need to be developed by the agency. We believe that: (1) the information already exists, (2) is in the IRS’ hands, and (3) should be included in an administrative record compiled for purposes of making a determination of petitioners’ claim.” 145 T. C. 8, at p. 7. Citations omitted).

And Judge Halpern throws up the usual confidentiality barrage to protect both innocent and guilty.

So, IRS, hand it over.

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