In Uncategorized on 04/17/2017 at 19:46

Whistleblower 16158-14W, 148 T. C. 12, filed 4/17/17, falls short. Even though his/her target, a gameplayer with FICA/FUTA, changed his/hers/its/their evil ways thereafter, to the enlargement of the fisc, ol’ 16158-14W gets nothing, because IRS didn’t even audit subsequent years, much less start proceedings.

Judge Buch: “The explanation attached to the Form 11369 [the whistleblower blow-off form] stated that the whistleblower was correct that the taxpayer had made errors but the cause of the errors was an ‘honest mistake’ made while updating its reporting systems. The explanation went on to say that ‘[i]t appears the * * * [taxpayer] has been convinced by its close call to become fully compliant with its withholding tax responsibilities and further examination is not warranted.’’ 148 T. C. 12, at p. 4.

Yeah, roger that. Like the dude would have straightened up and flown right if ol’ 16158-14W hadn’t tipped IRS off while IRS was auditing an unrelated matter.

Anyway, the changed compliance of the blown didn’t generate any ”collected proceeds,” at least according to Judge Buch’s view of Section 7623.

“We have described section 7623(b)(1) as ‘straightforward’ and ‘written in expansive terms’. Whistleblower 21276-13W v. Commissioner, 147 T.C. __ , __ (slip op. at 10-11) (Aug. 3, 2016).”

Yes, but.

“Collected proceeds do not include self-reported amounts collected when a taxpayer changes its reporting for years that are not part of the action. The Commissioner argues, and we agree, that because of the significant costs and heavy administrative burden, collected proceeds cannot include amounts collected for years after examination years on account of a taxpayer’s changing its reporting. Petitioner takes the definition of ‘collected proceeds’ as ‘all proceeds collected by the Government from the taxpayer’, Whistleblower 21276-13W v. Commissioner, 147 T.C. at __ (slip op. at 32), to an irrational extreme to argue that self-assessed amounts collected for future years are proceeds collected by the Government. Indeed, many, if not all, of the Commissioner’s examinations will have some influence on a taxpayer’s reporting. However, any determination of an award based on additional amounts collected for years following examination years would be based on speculation.” 148 T. C. 12, at pp. 13-14.

Straightforward, expansive, useless.





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