No, this is not a recipe for cleaning up Corona. Today we have Judge Goeke sticking Timothy J. Lewis, 154 T. C. 8, filed 4/8/20, for $15K out of the $222K whistleblower award he got, or 6.9%,  per sequestration formula.

IRS claims Tax Court has no jurisdiction to decide if an award should be subject to the 2011 Budget Control Act, as amended.

“Under section 7623(b)(4) we have jurisdiction to review the WBO’s determinations of whistleblower awards. The sequestration of petitioner’s award reduces the amount of the award. Our jurisdiction to review the WBO’s award determinations includes jurisdiction to review whether the WBO considered an inappropriate factor in making its award determination. Petitioner argues that the sequestration is an inappropriate factor. While respondent argues that the WBO merely followed the OMB’s guidance on the budget sequestration provisions, section 7623 confers on the WBO the sole statutory authority to determine whether a whistleblower is entitled to an award and, if so, the amount of the award. We are required to review the WBO’s determinations, including whether it properly exercised its discretion to follow any guidance given by the OMB and whether it appropriately applied the sequestration provisions. Accordingly, our jurisdiction under section 7623(b)(4) once invoked includes deciding whether the WBO properly applied the sequestration provisions to petitioner’s whistleblower award.” 154 T. C. 8, at pp. 22-23 (Footnote omitted).

Tim’s claim that the whistleblower money is a separate fund is a nonstarter, as collected proceeds are measuring tools for computing awards, not funding sources. So is the claim that the factors for determining the amount of the award are exclusive. See Reg. 301.7623-4(b). And whistleblower awards are not statutorily exempt from sequestration. So no abuse of discretion in sequestering.

Tim argues that target shifted treatment for the year after the audit sparked by Tim’s blowing, but Whistleblower 16158-14W puts paid to that. See my blogpost “Straightforward, Expansive, Useless,” 4/17/17.

There’s also argy-bargy about unused unified gift-estate credit when Target H died, but Target W will pay tax per Section 2204(a) on the credit shelter testamentary trust Target H set up, so no more proceeds for Tim to claim.