Judge Gale drops a ten-page blockbuster in Whistleblower 4792-19W, filed 2/2/24, that will delight fans of blowerdom and win-your-case-at-discovery CLEfloggers alike, and perk up your dull-and-grey Groundhog Day.

9219 wants to depose a bunch IRS exam employees (hi, Judge Holmes) who oversaw the auf’ing of a couple exam types who saw tainted (privileged) material that 9219 cribbed from Target (the blown, not the store). IRS claims no jurisdiction, admin record only, and Section 6103 taxpayer info.

9219 wants Rule 74(c)(3) general deposition of a party without that party’s consent, but Judge Gale blows that off in a footnote. “Although petitioner’s Motion is styled as if it were made under Rule 74(c)(3), which relates to depositions of a party opponent without that party’s consent, the notices of deposition…cite Rule 74(c)(2), which relates to depositions of nonparties without the consent of the opposing party. Among the reasons that the distinction between Rule 74(c)(2) and (3) is significant is that a deposition of a nonparty under Rule 74(c)(2) generally may be used during a Tax Court trial or other proceeding only for impeachment of the deponent as a witness, whereas a deposition of a party opponent under Rule 74(c)(3) may be used for any purpose. See Rules 74(f), 81(i). Furthermore, because the Commissioner speaks only through formal policy pronouncements, informal statements of his employees do not bind him and are not properly treated as his statements as a party to a case before the Tax Court.  We will therefore treat petitioner’s Motion as seeking to compel nonparty depositions under Rule 74(c)(2), as indicated in the notices of deposition, and we will recharacterize it accordingly.” Order, at p. 1, footnote 2. (Citations omitted).

Taishoff says, “Hey Congress, y’all limited Section 6015(e)(7) innocent spousery to the admin record, but added ‘newly-discovered evidence,’ which let in testimony that neither CCISO nor Appeals could take nor have opposing parties cross-examined. How ’bout doing the same for Section 7623? The Ogden Sunseteers have no way of taking testimony either.”

Of course, what chance is there that the IRS exam crew will testify on the nonexistent trial under present law? Anyway, Judge Gale delivers a Super Bowl-worthy punt: let petitioner show “whether and on what grounds an order compelling depositions under Rule 74(c)(2) is appropriate in this case in view of Berenblatt v. Commissioner, No. 7208-17W, 160 T.C. (May 24, 2023), Van Bemmelen v. Commissioner, 155 T.C. 64 (2020), and any other authorities pertinent to the proper application in this context of the precedent of the U.S. Court of Appeals for the District of Columbia Circuit.” Order, at p. 10. May the luck of the Irish attend ye, boyo, as you read these cases. I’ve already blogged them.

As for jurisdiction, IRS examined 9219’s claim, didn’t reject it out of hand, and did collect money. The only issue is whether IRS used 9219’s stuff. That’s not jurisdictional, otherwise Tax Court would have to try the whole case on the merits to see if it had jurisdiction. See Whistleblower 972-17W, 159 T.C. at 7–10; see also Lissack v. Commissioner, 68 F.4th at 1321; McCrory v. Commissioner, T.C. Memo. 2023-98, at *6.” Better yet, read my blog; I’ve blogged all these for your reading pleasure.

As for Section 6103 (a hot item in recent news, as a violator just took a five-year fall), if 9219 is trying to supplement the admin record, let 9219 show same, and let the parties dish on what Whistleblower 972-17W adds to the mix.

I can’t close without drawing attention to Judge Gale’s tour d’horizon of blower discovery at Order, pp. 6-8. It’s a ready-made drag-and-drop for your memo of law file. A tip of the battered Stetson to His Honor; battle-weary practitioners will thank you. Sir.