143 T. C. No. 15
UNITED STATES TAX COURT
MICA RINGO, Petitioner v. COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 29562-12W. Filed October 6, 2014.
P filed with R’s Whistleblower Office (W) an application for a whistleblower award under I.R.C. sec. 7623. On Nov. 7, 2012, W mailed to P a letter stating that P was ineligible for such an award because P did not provide R with information that resulted in the collection of any tax from the target. P timely filed a petition with this Court.
I.R.C. sec. 7623(b)(4) provides that “[a]ny determination regarding an award under paragraph (1), (2), or (3) [of I.R.C. sec. 7623(b)] may, within 30 days of such determination, be appealed to the Tax Court (and the Tax Court shall have jurisdiction with respect to such matter).”
On June 11, 2013, W notified P that W was still considering P’s application and that W had mailed the Nov. 7, 2012, letter to P in error. R then moved to dismiss this case for lack of jurisdiction. -2-
Held: The Nov. 7, 2012, letter was a determination and this Court has jurisdiction with respect to the matter.
Held, further, the fact that R continued to consider P’s application after sending the Nov. 7, 2012, letter does not terminate this Court’s jurisdiction.
Thomas C. Pliske and Shine Lin, for petitioner.
Jonathan D. Tepper, for respondent.
OPINION
COLVIN, Judge: The Internal Revenue Service (IRS) Whistleblower Office
mailed to petitioner a letter on November 7, 2012, stating that he was ineligible for
a whistleblower award under section 7623. Petitioner commenced this
whistleblower proceeding by timely filing a petition pursuant to section
7623(b)(4).1 Respondent moves to dismiss the case for lack of jurisdiction. As
discussed below, we will deny respondent’s motion.
1 Section references are to the Internal Revenue Code in effect at all relevant times. Rule references are to the Tax Court Rules of Practice and Procedure. -3-
Neither party requested a hearing, and we conclude that none is necessary to
decide respondent’s motion to dismiss. The following undisputed information
appears in the pleadings or respondent’s motion to dismiss.
Petitioner resided in Texas when the petition was filed.
Background
On February 17, 2011, petitioner filed with the Whistleblower Office a
Form 211, Application for Award for Original Information. Petitioner filed an
amended Form 211 with that office on October 6, 2011.
On November 7, 2012, the Whistleblower Office mailed to petitioner a letter
(November 7, 2012, letter) stating that he was ineligible for a whistleblower award
under section 7623 because he had not provided the IRS with information that
resulted in the collection of any proceeds. That letter stated:
Dear Mica Ringo:
We have considered your application for an award dated February 11, 2011. Under Internal Revenue Code Section 7623, an award may be paid only if the information provided results in the collection of additional tax, penalties, interest or other proceeds. In this case, the information you provided did not result in the collection of any proceeds. Therefore, you are not eligible for an award.
Although the information you submitted did not qualify for an award, thank you for your interest in the administration of the internal revenue laws. -4-
If you have any further questions in regards to this letter, please feel free to contact the Informant Claims Examination Team at * * *.
Sincerely,
/s
Cindy Wilde Supervisor--Whistleblower Office, Ogden
Petitioner petitioned the Court on December 7, 2012, to invoke our
jurisdiction under section 7623(b)(4). On June 11, 2013, the Whistleblower
Office sent a letter (June 11, 2013, letter) to petitioner stating that the November 7,
2012, letter had been sent in error and that the Whistleblower Office was still
considering his application for an award. That letter said:
Dear Mr Ringo:
The L-1010 letter dated November 7 2012 [i.e., the November 7, 2012, letter] was sent to you in error. We are still considering your application for award F-211. We are sorry for this inconvenience.
Cindy Wilde Supervisor--Whistleblower Office, Ogden -5-
Discussion
The Tax Court may exercise jurisdiction only to the extent expressly
provided by Congress. See sec. 7442; Breman v. Commissioner, 66 T.C. 61, 66
(1976); see also Rule 13. Respondent contends that the Court lacks jurisdiction in
this case, and petitioner does not object to respondent’s assertion. However, our
jurisdiction is not expanded or contracted by the positions of the parties. Thus, it
is not dispositive that both parties claim that we lack jurisdiction. SECC Corp. v.
Commissioner, 142 T.C. ___, ___ (slip op. at 8) (Apr. 3, 2014); Charlotte’s Office
Boutique, Inc. v. Commissioner, 121 T.C. 89, 102 (2003), aff’d, 425 F.3d 1203
(9th Cir. 2005). We will independently decide whether we have jurisdiction.
In the June 11, 2013, letter, the Whistleblower Office said it was still
considering information petitioner had provided. Thus, respondent contends that
the November 7, 2012, letter was not a “definitive determination” as to petitioner’s
application and that we lack jurisdiction in this case.
We disagree. Whether the Court has jurisdiction in a case depends on facts
as of the time that our jurisdiction is invoked. See Charlotte’s Office Boutique,
Inc. v. Commissioner, 425 F.3d at 1208; NT, Inc. v. Commissioner, 126 T.C. 191,
194 n.2 (2006); see also Smith v. Sperling, 354 U.S. 91, 93 n.1 (1957) (“‘It is quite
clear that the jurisdiction of the Court depends upon the state of things at the time -6-
of the action brought, and that after vesting, it cannot be ousted by subsequent
events.’” (quoting Mollan v. Torrance, 22 U.S. (9 Wheat.) 537, 539 (1824)
(Marshall, C.J.))). Once the Court acquires jurisdiction over a matter, our
jurisdiction generally continues unimpaired until we enter our decision or our
jurisdiction is otherwise terminated by the Court. See NT, Inc. v. Commissioner,
126 T.C. at 194 n.2; Wagner v. Commissioner, 118 T.C. 330 (2002); Naftel v.
Commissioner, 85 T.C. 527, 529-530 (1985); see also Grupo Dataflux v. Atlas
Global Grp. L.P., 541 U.S. 567 (2004); Smith, 354 U.S. at 93 n.1.
Section 7623(b)(4) provides that “[a]ny determination regarding an award
under paragraph (1), (2), or (3) may, within 30 days of such determination, be
appealed to the Tax Court (and the Tax Court shall have jurisdiction with respect
to such matter).”2 Thus, a whistleblower proceeding is commenced under section
7623(b)(4) when (1) the IRS makes a determination regarding an award under
section 7623(b)(1), (2), or (3); and (2) a petition is timely filed as to that
determination. See Whistleblower 14106-10W v. Commissioner, 137 T.C. 183,
2 Para. (1) of sec. 7623(b) generally requires that the IRS pay an individual 15% to 30% of the collected proceeds where the IRS proceeds with any administrative or judicial action based on certain information furnished by the individual. Para. (2) generally lets the IRS pay an individual up to 10% of the collected proceeds in certain other cases. Para.
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143 T. C. No. 15
UNITED STATES TAX COURT
MICA RINGO, Petitioner v. COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 29562-12W. Filed October 6, 2014.
P filed with R’s Whistleblower Office (W) an application for a whistleblower award under I.R.C. sec. 7623. On Nov. 7, 2012, W mailed to P a letter stating that P was ineligible for such an award because P did not provide R with information that resulted in the collection of any tax from the target. P timely filed a petition with this Court.
I.R.C. sec. 7623(b)(4) provides that “[a]ny determination regarding an award under paragraph (1), (2), or (3) [of I.R.C. sec. 7623(b)] may, within 30 days of such determination, be appealed to the Tax Court (and the Tax Court shall have jurisdiction with respect to such matter).”
On June 11, 2013, W notified P that W was still considering P’s application and that W had mailed the Nov. 7, 2012, letter to P in error. R then moved to dismiss this case for lack of jurisdiction. -2-
Held: The Nov. 7, 2012, letter was a determination and this Court has jurisdiction with respect to the matter.
Held, further, the fact that R continued to consider P’s application after sending the Nov. 7, 2012, letter does not terminate this Court’s jurisdiction.
Thomas C. Pliske and Shine Lin, for petitioner.
Jonathan D. Tepper, for respondent.
OPINION
COLVIN, Judge: The Internal Revenue Service (IRS) Whistleblower Office
mailed to petitioner a letter on November 7, 2012, stating that he was ineligible for
a whistleblower award under section 7623. Petitioner commenced this
whistleblower proceeding by timely filing a petition pursuant to section
7623(b)(4).1 Respondent moves to dismiss the case for lack of jurisdiction. As
discussed below, we will deny respondent’s motion.
1 Section references are to the Internal Revenue Code in effect at all relevant times. Rule references are to the Tax Court Rules of Practice and Procedure. -3-
Neither party requested a hearing, and we conclude that none is necessary to
decide respondent’s motion to dismiss. The following undisputed information
appears in the pleadings or respondent’s motion to dismiss.
Petitioner resided in Texas when the petition was filed.
Background
On February 17, 2011, petitioner filed with the Whistleblower Office a
Form 211, Application for Award for Original Information. Petitioner filed an
amended Form 211 with that office on October 6, 2011.
On November 7, 2012, the Whistleblower Office mailed to petitioner a letter
(November 7, 2012, letter) stating that he was ineligible for a whistleblower award
under section 7623 because he had not provided the IRS with information that
resulted in the collection of any proceeds. That letter stated:
Dear Mica Ringo:
We have considered your application for an award dated February 11, 2011. Under Internal Revenue Code Section 7623, an award may be paid only if the information provided results in the collection of additional tax, penalties, interest or other proceeds. In this case, the information you provided did not result in the collection of any proceeds. Therefore, you are not eligible for an award.
Although the information you submitted did not qualify for an award, thank you for your interest in the administration of the internal revenue laws. -4-
If you have any further questions in regards to this letter, please feel free to contact the Informant Claims Examination Team at * * *.
Sincerely,
/s
Cindy Wilde Supervisor--Whistleblower Office, Ogden
Petitioner petitioned the Court on December 7, 2012, to invoke our
jurisdiction under section 7623(b)(4). On June 11, 2013, the Whistleblower
Office sent a letter (June 11, 2013, letter) to petitioner stating that the November 7,
2012, letter had been sent in error and that the Whistleblower Office was still
considering his application for an award. That letter said:
Dear Mr Ringo:
The L-1010 letter dated November 7 2012 [i.e., the November 7, 2012, letter] was sent to you in error. We are still considering your application for award F-211. We are sorry for this inconvenience.
Cindy Wilde Supervisor--Whistleblower Office, Ogden -5-
Discussion
The Tax Court may exercise jurisdiction only to the extent expressly
provided by Congress. See sec. 7442; Breman v. Commissioner, 66 T.C. 61, 66
(1976); see also Rule 13. Respondent contends that the Court lacks jurisdiction in
this case, and petitioner does not object to respondent’s assertion. However, our
jurisdiction is not expanded or contracted by the positions of the parties. Thus, it
is not dispositive that both parties claim that we lack jurisdiction. SECC Corp. v.
Commissioner, 142 T.C. ___, ___ (slip op. at 8) (Apr. 3, 2014); Charlotte’s Office
Boutique, Inc. v. Commissioner, 121 T.C. 89, 102 (2003), aff’d, 425 F.3d 1203
(9th Cir. 2005). We will independently decide whether we have jurisdiction.
In the June 11, 2013, letter, the Whistleblower Office said it was still
considering information petitioner had provided. Thus, respondent contends that
the November 7, 2012, letter was not a “definitive determination” as to petitioner’s
application and that we lack jurisdiction in this case.
We disagree. Whether the Court has jurisdiction in a case depends on facts
as of the time that our jurisdiction is invoked. See Charlotte’s Office Boutique,
Inc. v. Commissioner, 425 F.3d at 1208; NT, Inc. v. Commissioner, 126 T.C. 191,
194 n.2 (2006); see also Smith v. Sperling, 354 U.S. 91, 93 n.1 (1957) (“‘It is quite
clear that the jurisdiction of the Court depends upon the state of things at the time -6-
of the action brought, and that after vesting, it cannot be ousted by subsequent
events.’” (quoting Mollan v. Torrance, 22 U.S. (9 Wheat.) 537, 539 (1824)
(Marshall, C.J.))). Once the Court acquires jurisdiction over a matter, our
jurisdiction generally continues unimpaired until we enter our decision or our
jurisdiction is otherwise terminated by the Court. See NT, Inc. v. Commissioner,
126 T.C. at 194 n.2; Wagner v. Commissioner, 118 T.C. 330 (2002); Naftel v.
Commissioner, 85 T.C. 527, 529-530 (1985); see also Grupo Dataflux v. Atlas
Global Grp. L.P., 541 U.S. 567 (2004); Smith, 354 U.S. at 93 n.1.
Section 7623(b)(4) provides that “[a]ny determination regarding an award
under paragraph (1), (2), or (3) may, within 30 days of such determination, be
appealed to the Tax Court (and the Tax Court shall have jurisdiction with respect
to such matter).”2 Thus, a whistleblower proceeding is commenced under section
7623(b)(4) when (1) the IRS makes a determination regarding an award under
section 7623(b)(1), (2), or (3); and (2) a petition is timely filed as to that
determination. See Whistleblower 14106-10W v. Commissioner, 137 T.C. 183,
2 Para. (1) of sec. 7623(b) generally requires that the IRS pay an individual 15% to 30% of the collected proceeds where the IRS proceeds with any administrative or judicial action based on certain information furnished by the individual. Para. (2) generally lets the IRS pay an individual up to 10% of the collected proceeds in certain other cases. Para. (3) sets forth rules under which the IRS may reduce an award otherwise payable under para. (1) or (2). -7-
186-187 (2011); Kasper v. Commissioner, 137 T.C. 37, 41 (2011); Cooper v.
Commissioner, 135 T.C. 70, 73-74 (2010).
The November 7, 2012, letter contains a determination for purposes of
section 7623(b)(4). See Cooper v. Commissioner, 135 T.C. at 75-76 (stating that
this Court has jurisdiction under section 7623 with regard to a letter not labeled a
determination where, as here, the letter stated that the applicant was not entitled to
an award and provided an explanation for that conclusion); see also Kasper v.
Commissioner, 137 T.C. at 41. The fact that the Whistleblower Office said in a
letter dated June 11, 2013, that the determination was not definitive does not
terminate this Court’s jurisdiction. The November 7, 2012, letter contains a
determination, and petitioner filed a timely petition invoking our jurisdiction
under section 7623(b)(4) with respect to that matter. Our jurisdiction is unaffected
by the fact that the Whistleblower Office later told petitioner it was still
considering information he provided.
Our conclusion is supported by consideration of rules relating to notices of
deficiency. The Court acquires jurisdiction in a deficiency case when the IRS has
determined a deficiency and the taxpayer timely files a petition. See secs. 6212(a),
6213(a). It is the determination of a deficiency, rather than the existence of a
deficiency, that provides the basis for the Court’s jurisdiction. See, e.g., Hannan -8-
v. Commissioner, 52 T.C. 787, 791 (1969). Thus, even if a determination in a
notice of deficiency is erroneous or the Commissioner concedes the determination
in full, the notice is generally not rendered void but continues to provide a basis
for our jurisdiction. See, e.g., Charlotte’s Office Boutique, Inc. v. Commissioner,
121 T.C. at 103 (stating that the Commissioner’s concession of employment tax
issue during a proceeding in this Court did not deprive the Court of jurisdiction
over the subject matter underlying that issue); LTV Corp. v. Commissioner, 64
T.C. 589 (1975) (stating that the Commissioner’s concession of no deficiency for a
year did not deprive the Court of jurisdiction over the subject matter of that year);
Cawal v. Commissioner, T.C. Memo. 1992-444. Similarly, the Court does not lose
jurisdiction when the Commissioner wishes to revoke or issues in error a notice of
determination in a collection case. Kim v. Commissioner, T.C. Memo. 2005-96.3
3 In Whistleblower 22231-12W v. Commissioner, T.C. Memo. 2014-157, at *12-*13, we said that “[s]ince the [Whistleblower] Office was still investigating * * * [an issue raised in a Whistleblower’s claim], it had not yet made ‘a final administrative decision regarding petitioner’s whistleblower claim in accordance with the established procedures.’” Our holding in Whistleblower 22231-12W is consistent with our holding herein because in Whistleblower 22231-12W there had not been a determination at the time the petition was filed. -9-
On the basis of the foregoing, we hold that we have jurisdiction, and we will
deny respondent’s motion to dismiss for lack of jurisdiction.
An appropriate order will
be issued.