Maybe the easy times in Ogden, UT, are coming to an end, and the Ogden Sunseteers, a/k/a the Whistleblower Office, have to do more than say “we didn’t use the stuff” to blow off the blowers.

STJ Diana L. (“Sidewalks of New York”) Leyden thus instructs the Sunseteers in John R. Dee, Docket No. 12649-16W, filed 8/24/24. John claims the administrative record is deficient, as is the OS’ explanation of how they dealt with John’s blowing.

Front and center is John’s claim that he blew on Target’s expensing “expenses incurred for remodeling, enhancements, and asset replacements” rather than properly capitalizing same. Order, at p. 2. OS claim that Target submitting a Form 3115 change of accounting method around the time John sent in his Form 211, and that turned them on. But all the admin record shows is a disallowance of a deduction, no discussion of expense-vs-capital. Note that $130K of additional tax was collected after all adjustments were made as a result of the disallowed deduction.

Likewise OS claims that IRS didn’t audit Target’s income tax return. But John blew on Target’s employment tax shenanigans, which the Form 3115 didn’t mention. However, IRS did audit and found the FICA stuff OK for one year, but not for two (count ’em, two) succeeding years.

There’s already been one remand, but the copy of the supplemental notice that issued therefrom, which made it into the record, is undated, and anyway still doesn’t mention expense-vs-capital.

Now adding stuff to the admin record in whistleblower cases is the exception rather than the rule.

“We clarified that such supplementation is limited to three narrow circumstances: (1) if the agency ‘deliberately or negligently excluded documents that may have been adverse to its decision,’ (2) if background information was needed ‘to determine whether the agency considered all the relevant factors,’ or (3) if the ‘agency failed to explain administrative action so as to frustrate judicial review[.].'” Order, at p. 10. (Citations omitted).

A certified admin record is presumed complete, and the proponent of additions must provide clear evidence to show that OS considered the additions, although not including same in the admin record. The gaps between what OS said they did and what John shows they saw is enough to deny summary J to IRS.

So let the OS ” explain whether petitioner’s claim substantially contributed to the adjustment… regarding the reduced deduction for certain repairs; and (2) whether Taxpayer’s employment tax was examined for [Years Two and Three], if proceeds were collected with respect to any such examination, and if so, whether petitioner’s claim regarding Taxpayer’s FICA Tip Credit substantially contributed to the examination and collection of proceeds.” Order, at p. 14.

The Sunseteers get 60 (count ’em, 60) days to do it.

A docket search shows John is pro se. He gets a Taishoff “Good Job.”