Whistleblower 4496-15W, 148 T. C. 19, filed 5/25/17, is unappealing. No, that’s not a personal comment; I do not know him. But having been nicked for 7.3% of his award because of the famous sequester in the Budget Control Act of 2011, 4496 wants Tax Court to make the Ogden Sunseteers hand him the whole enchilada.

But 4496 has another problem. And Judge Lauber will tell us all about it.

“The IRS Whistleblower Office (Office) offered petitioner an award that had been reduced by 7.3% on account of the ‘sequester’ imposed by the Budget Control Act of 2011.  Petitioner accepted this award.  In his acceptance letter he agreed to ‘waive all of * * *[his] administrative and judicial appeal rights,’ including his ‘right to petition the United States Tax Court.’  The Office subsequently issued petitioner a check in the agreed-upon amount.  After cashing that check he filed a petition challenging the 7.3% reduction of his award on account of the ‘sequester.’” 148 T. C. 19, at pp. 2-3.

BTW, 4496 is fighting about $232,697. When the Ogden Sunseteers gave his attorney the bad news, the attorney twice tried to get OS to agree to let him duke it out about the 7.3%, and if he won, give him the $232K. OS said  ”negatory, good buddy,” twice.

So 4496 signed the acceptance letter, got the check for $2,954,933 and cashed it, and banged in a petition.

But does Tax Court have jurisdiction here? OS first claimed that either 4496’s acceptance letter or OS’s receipt thereof was a “determination” that triggered the 30-day petition period, and 4496 was too late. 4496 said ”Until I got the money nothing was determined.”

OS folds and says, “OK the date you got the check is the date, and you’re in within thirty days.”

Not so fast, says Judge Lauber.

“Although we are not bound by the parties’ views with respect to our jurisdiction, Ringo v. Commissioner, 143 T.C. 297 (2014), we agree that, on the facts involved here, the 30-day window must be calculated by reference to the issuance of the award check.  In the case of a favorable award decision, the Office’s ‘determination’ denotes a decision that the whistleblower will receive an award in a specific amount.  As respondent acknowledges, the award that the Office proposed in its… letter remained uncertain even after petitioner accepted it, because it was subject to conditions subsequent that could cause the award amount to be reduced.  Petitioner received no intervening communication from the Office (such as a determination letter) confirming the final amount of his award.  That being so, on the basis of the regulations that existed at that time he could not know that he would actually receive an award in the agreed-upon amount until the check was in fact issued to him.” 148 T. C. 19, at pp. 10-11 (footnote omitted).

You remember Mica Ringo, whose case is still pending. No? Then see my blogpost “Let’s You and Him Fight,” 10/9/14.

So once again, the check’s the thing. Before the check issued, taxpayer could have litigated, appealed, won, settled or whatever. It ain’t over till it’s over.

But now that 4496 got in the door of the Glasshouse at 400 Second Street, NW, he gets a rapid right-about-face and quick-march right back out. With no more money.

The deal OS offered 4496 wasn’t ambiguous; he was given a five-line arithmetically-correct analysis of what he was getting. If unhappy, he could have rejected the deal, got a determination letter and petitioned that (there is no mandatory form for a whistleblower determination). If there was any mistake, it was unilateral and not mutual.

Courts like settlements. And whatever the merits of 4496’s argument about sequester, parties often give up arguable or even winnable positions to settle a case. Been there, done that.

I’m guessing that 4496 and his attorney wanted some cash after waiting who knows how long since they handed IRS enough goods to whack the taxpayer for $14 million and get 22% out of a possible 30% thereof. So maybe so they figured that putting up another $60 bucks plus summary J papers wasn’t worse than a lottery ticket with a $232,697 payout.

As the hockey players say, “Shoot the puck, it might go in.”