In Uncategorized on 12/28/2022 at 16:23

For once, a whistleblower did get an award, but the Ogden Sunseteers gave with the left hand (information IRS unlikely to find on their own, and provided enough substantiation to nail the targets),so 15% sequestered rewards, but took with the right (held off telling IRS until his fellow fraudsters fired him from the business and shortchanged him with the spoils, so the bad guys got away with some skullduggery).

Felix Luu, 2022 T. C. Memo. 2022-126, filed 12/28/22, was engaged with family in poultry farming and running a supermarket. They were also skimming cash receipts. Felix first filed a Form 211 with Ogden, and later sued in State court when he discovered he was being shortchanged, whereupon the family came clean with IRS, except they were a wee bit parsimonious with the truth. IRS agrees that Felix’s blow netted better than $2 million, and gave him 15% (less sequester).

Felix wants more.

Judge Christian N (“Speedy”) Weiler has this one, and he goes through the entire Whistleblower story, statute and regs. Of course, Van Bemmelen gets heavy play: though both sides move for summary J, there’s no fact-finding as these cases go off on administrative record – abuse of discretion. And Judge Speedy Weiler can’t find any.

First, the good news. ” The record reflects the WBO’s process in determining that two positive factors existed, with the first positive factor being how the information petitioner furnished was previously unknown to the IRS, and second, that the information petitioner furnished identified behavior that the IRS was unlikely to identify or was difficult to detect by reasonable diligence. See Treas. Reg. § 301.7623-4(b)(1)(ii) and (iii).” T. C. Memo. 2022-126, at p. 20.

And though IRS is parsimonious with detail how they gave Felix another 7% for this, Felix didn’t ask for more, and Judge Speedy Weiler can’t find that arbitrary or capricious.

Next, the bad news. Felix delayed blowing for a couple years (hi, Judge Holmes) until the family fired him, and Felix also took some OTB (off the books) cash his own self. So Felix is knocked back down to the base 15%, and Judge Speedy Weiler doesn’t find that arbitrary or capricious either.

Now we all remember the Swiss banker who blew on his old bosses while in the slammer, netting around $46,000 per day while he was in durance vile, on a 26% award.

Maybe what poor ol’ Felix gave IRS was chickenfeed.


Leave a Reply

Please log in using one of these methods to post your comment: Logo

You are commenting using your account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.

%d bloggers like this: