In Uncategorized on 08/26/2020 at 18:06

Judge Emin (“Eminent”) Toro engages in what Judge David Gustafson calls ” the interesting and difficult theoretical question whether we have the power to ‘enforce’ our decisions.” 155 T. C. 2, at p. 27.

Though Judge Gustafson, concurring in result, says nobody questions that proposition, so why go there as nobody has briefed or argued the point, Judge Eminent has Ch. J. Foley, and JJ. Gale, Thornton, Morrison, Buch, Nega, Pugh, Ashford, Urda, Copeland, and Greaves on board. Judge Jones is down with the holding on the merits.

Here again are Whistleblower 21276-13W and 21277-13W. And they’re claiming they shouldn’t be sequestered on the back piece of their monumental whistleblowing award, when the James Bond number they did on some offshore CD pirates handed IRS a home run.

Backstory in my blogposts “Sunset in Ogden,” 6/2/15, and “Dares or Forfeits,” 8/3/16.

The 212s claim that when Tax Court entered decision after the second of the TCs aforementioned, the Court entered the full 24% stipulated between the parties, but didn’t reduce same by the sequester mandated by 2 U.S.C. §§ 900-907 (2018). So the 212s want the full amount, and Tax Court should order IRS to pay it.

Before deciding what they can order IRS to do, Judge Eminent inquires if Tax Court has jurisdiction to order anybody to do anything. But nobody questions jurisdiction to decide the matter at hand.

And remand would be futile, because the sole question is one the answer to which the parties have already stipulated.

Howbeit, “…Congress made clear that the Court ‘shall have such assistance in the carrying out of its lawful writ, process, order, rule, decree, or command as is available to a court of the United States,’ sec. 7456(c). In adopting section 7456(c), Congress confirmed the Court’s power to enforce its own orders.” 155 T. C. 2, at p. 15. (Footnote omitted, but read it; and then ask yourself “what price Section 6673(b)(2)?”).

And the finality provisions of Section 7481 play no part here, as all that is at issue is enforcement of the decision already entered and final. Judge Eminent opens no doors to any attempt to relitigate a final decision.

But there’s a hitch.

IRS and the 212s stipulated what would happen if the 212s won on the back piece. But they never bothered to tell Tax Court exactly to what they stipulated.

“As an initial matter, we note that the parties explicitly addressed the sequestration issue in their partial settlement agreement. There, the parties agreed that $20,000,001 paid to the Government as restitution constituted collected proceeds and that the whistleblowers were entitled to an award of 24%, less a sequester reduction. The parties left for judicial resolution the treatment of the remaining $54,131,693.42 collected by the Government, but they expressly noted that “[a]ny such further payment will be reduced by the sequester reduction percentage in effect at the time of payment.” (Emphasis added.) Although the parties did not inform the Court of the precise terms of their settlement, they did explain that a settlement had been reached. And the settlement provided the backdrop for our subsequent proceedings.” 155 T. C. 2, at pp. 21-22. (Emphasis by the Court).

Judge Eminent isn’t going to let these games go on.

“The whistleblowers now seek to back out of their deal, contending that our entry of the January 2017 Decisions in specific amounts foreclosed their agreement to reduce any further award payments by the applicable sequester reduction percentage when the award payments were made. We disagree. Nothing in the January 2017 Decisions set aside this express agreement of the parties.

“The January 2017 Decisions do not purport to specify a particular amount that the Commissioner must pay to each whistleblower in all events. Rather, the January 2017 Decisions set out the gross amounts ‘calculated’ as part of the Court’s Opinion, based on the underlying ‘collected proceeds’ and the ‘award percentage’ the parties had stipulated in connection with that Opinion.” 155 T. C. 2, at p. 22.

Finally, and most importantly, Judge Eminent has a takeaway for all practitioners.

“These cases should, however, serve as a cautionary tale to parties that reach partial settlements. Filing with the Court complete copies of the agreements that reflect any settlements reached by the parties gives the Court a fuller picture of the disputes that remain at issue and permits the Court to render decisions that appropriately take into account the parties’ agreements. That, in turn, may spare the parties the inconvenience and expense of postdecision litigation avoidable through greater transparency.” 155 T. C. 2, at pp. 25-26.

And I give counsel for both parties a Taishoff “bad move.”









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