[00:00:00] Speaker 03: case number 24-1001, Inray Sealed Case. [00:00:04] Speaker 03: Mr. Wright for the appellant. [00:00:06] Speaker 03: Ms. [00:00:06] Speaker 03: Wicks for the appellee. [00:00:09] Speaker 02: Morning, counsel. [00:00:13] Speaker 02: Mr. Wright, please proceed when you're ready. [00:00:15] Speaker 00: Thank you, Your Honor. [00:00:19] Speaker 00: Judge Sreenivasan, it may please the court. [00:00:22] Speaker 00: Appellant who is present here today substantially contributed to identifying and exposing an industry-wide tax abuse case. [00:00:30] Speaker 00: The question before the court, what is the standard of review in whistleblower cases before the US tax court? [00:00:38] Speaker 00: Your honors, the tax court standard of review in whistleblower cases arising under section 7623B1 is de novo. [00:00:46] Speaker 00: That straightforward conclusion is supported by statutory text, which speaks only in terms of shall and Congress's purposes, which were to replace the IRS's effectively unruable discretion in whistleblower cases [00:01:00] Speaker 00: with a mandatory scheme that was predictable and governed by law. [00:01:05] Speaker 00: De novo review is also the only way to avoid upending Congress's entire scheme as unconstitutional under the appointments clause. [00:01:13] Speaker 00: This court should reverse. [00:01:16] Speaker 00: In the alternative, this court should reverse because the whistleblower office abused its discretion. [00:01:21] Speaker 00: Its findings in support of the reduced award in this case contradicted its own previous findings in closely related cases. [00:01:29] Speaker 00: And its alternative finding, that petitioner was not the original source of the information that exposed the tax fraud in this case, is squarely contradicted by all the evidence in the record, including the whistleblower office's own findings that petitioner identified and exposed the issue in 2005, which had been previously unknown to the IRS. [00:01:50] Speaker 00: Such inconsistent, unsupported decision-making is the very definition of an abusive discretion. [00:01:56] Speaker 00: And so even if the tax court was correct, that an abuse of discretion standard applied, the tax court erred in affirming the reduced award for this particular taxpayer. [00:02:06] Speaker 00: Your Honor, subject to your questions. [00:02:09] Speaker 02: So I just have a question on the latter part of your argument. [00:02:12] Speaker 02: Let's just put aside the standard review question for the moment for these purposes, and let's just focus on the second question that you posed. [00:02:19] Speaker 02: On that one, is there any dispute that [00:02:24] Speaker 02: It's true that unlike in the past instance, in the current instances before us in this case, the IRS team was already investigating the issue at the time that the information came over from the Senate. [00:02:39] Speaker 02: I take it that it's undisputed that that's a distinction. [00:02:42] Speaker 02: Now you might think that's a distinction without a difference because [00:02:47] Speaker 02: It may be that the reason that the IRS team was looking into it was because of information that was supplied by Petitioner at the outset to begin with. [00:02:54] Speaker 02: But I just want to get straight in my mind, whether there's any dispute, that there is, in fact, a distinction. [00:03:00] Speaker 02: We could have an argument about whether it's a distinction with a difference between the two scenarios in that this one, unlike the others, the IRS team had already embarked on an investigation. [00:03:11] Speaker 00: Yes, your honor. [00:03:12] Speaker 00: That is the distinction. [00:03:13] Speaker 00: And that's precisely the distinction that the whistleblower office and the particular analysts involved found. [00:03:20] Speaker 00: If I can delve into the facts, the whistleblower office sent us a series of email chains down to the field team to inquire. [00:03:26] Speaker 01: Sorry, I just want to make sure I understand what you're agreeing to. [00:03:30] Speaker 01: You're agreeing that for every other [00:03:34] Speaker 01: instance, the team at issue was not onto these particular issues before 2009 when the Senate committee information is turned over. [00:03:44] Speaker 00: But your honor, there were four related cases under under the same scheme. [00:03:51] Speaker 00: Each one had a variation in terms of when the field team [00:03:54] Speaker 00: was alerted to the petitioner's information in the first instance in 2005, versus whether or not they became alerted to the petitioner's information arising out of the permanent subcommittee on investigations report. [00:04:06] Speaker 00: So there's some slight variations. [00:04:08] Speaker 01: There was. [00:04:09] Speaker 01: But I think that if your position is that for some of the other entities, the team was advised based on the whistleblower's 2005 contacts, then I would think you would be disagreeing with what Judge Trinovasan said. [00:04:24] Speaker 00: No, it's not my intention to disagree. [00:04:28] Speaker 00: That is the distinction here, in that there was a decision by the analyst that, based on the feedback from the field team, there was an email exchange that the reason that this investigation started, according to the field team, was that this was a subsequent year examination as of 2006. [00:04:46] Speaker 00: But there was an objective fact decided in the other cases [00:04:49] Speaker 00: that the petitioner was the one that actually brought the information forward to the IRS in the first instance in 2005. [00:04:54] Speaker 00: So there's a bit of a fact issue that remains in dispute as to what actually started this particular field team with this targeted taxpayer to start the investigation. [00:05:03] Speaker 00: So that's the factual issue. [00:05:05] Speaker 00: And we submit that the record, the existing record in the Ministry of Claim File doesn't fully address this particular issue. [00:05:10] Speaker 00: And this email exchange is at the appendix 219 to [00:05:14] Speaker 00: 227 that goes through this. [00:05:17] Speaker 00: There's open questions concerning whether or not certain IDS IDRs, I'm sorry, are in existence, which would have revealed sort of the start, but there was a retired IRS employee who wasn't available. [00:05:29] Speaker 00: So this, Your Honor, this is the distinction in this particular case. [00:05:32] Speaker 02: So then where that leaves us, I think, and with respect to this kind of second way of looking at this, strip away the standard review for the moment, is that [00:05:41] Speaker 02: For you to prevail, and it might be enough, but just so I understand the issue, for you to prevail, it's necessary for us to conclude that the question of how the IRS team that was conducting this investigation decided to launch and whether that was predicated on information supplied by the petitioner is critical. [00:06:01] Speaker 02: Because your position is, it may be that they had already launched by the time they got the information from the Senate committee, unlike all the other situations. [00:06:11] Speaker 02: But we just don't know why they launched in the first place. [00:06:14] Speaker 02: And if that was because of what the petitioner supplied at the outset in 2005, 2006, then they should all be treated similarly. [00:06:25] Speaker 02: If they launched that for some other reason, then maybe there is a reason to treat them differently. [00:06:29] Speaker 02: Yes, Your Honor, that's correct. [00:06:31] Speaker 00: We believe we would prevail in that event if there's an affirmative finding of fact that petitioner objectively was the first to alert the IRS in 2005. [00:06:38] Speaker 00: In addition, we believe we would prevail under the abuse discretion standard for a number of additional reasons. [00:06:44] Speaker 00: Within the actual findings, initial findings of the Whistler office, the factual findings, they found that two factors did apply, but those factors did not make their way into the ultimate one positive factor that was determined in this case. [00:06:56] Speaker 00: So there's some inconsistency internally within the actual findings. [00:07:00] Speaker 00: Those two ways of looking at it seem to sort of merge. [00:07:03] Speaker 02: I mean, I think there's probably a way to distinguish them, but they seem to sort of merge because the one factor [00:07:08] Speaker 02: that you say was floated at the outset but then wasn't factored in the decision at the end is whether there was the petitioner identified something new that the IRS hadn't looked into before. [00:07:21] Speaker 02: And the way that he would have identified something new that the IRS hadn't looked into before was if he were the source of the information at the outset. [00:07:27] Speaker 02: So in some ways they kind of, they sort of come together. [00:07:30] Speaker 02: It all turns on why did this IRS team launch? [00:07:34] Speaker 00: Correct. [00:07:35] Speaker 00: And then I would agree that there's some conflation with the positive factors in terms of how they're drafted under the regulation. [00:07:46] Speaker 02: And then on the, if I can ask you a question on the standard review, unless you have further questions about- Let's follow up on the facts again. [00:07:54] Speaker 01: that the key is whether. [00:07:57] Speaker 01: The [00:08:05] Speaker 01: We were in fact agreeing that the team was onto these issues before 2009. [00:08:09] Speaker 01: And the question being, why were they onto these issues? [00:08:15] Speaker 01: So typically, one way of thinking about this case would be it should be your burden, if it's abuse of discretion, to show something contrary to the analyst's finding in the record. [00:08:25] Speaker 01: And if he's saying the team was onto these issues independently of any information from the whistleblower, what would you point to as the contrary record evidence? [00:08:38] Speaker 00: Yes, Your Honor. [00:08:40] Speaker 00: Petitioners supplemented the record before the tax court and also raised these issues before the whistleblower office as well. [00:08:49] Speaker 00: He first brought this scheme to light in 2005. [00:08:53] Speaker 00: And several of the other related taxpayers for the scheme, there was an adjudicated finding of the positive factor that it was in fact petitioner. [00:09:01] Speaker 00: who first alerted the IRS to this overall tax scheme. [00:09:05] Speaker 00: So it's almost like administrative race judicata. [00:09:08] Speaker 00: There's a factual finding that the agency's already made, that he was the one. [00:09:11] Speaker 01: So you're relying on the, right, the findings in the other cases, but you're not saying that there is a piece of evidence in the administrative record that somehow ties this team to the whistleblowers pre-2008 context. [00:09:25] Speaker 00: That's correct. [00:09:26] Speaker 00: That is the missing gap, Your Honor, and the existing administrative record. [00:09:29] Speaker 00: And the sole evidence that we can point to that the government proffers is what identified that email exchange where the whistleblower office analysts asked the field team what started this and the response is this was a subsequent year examination. [00:09:41] Speaker 00: But subsequent to what there's actually no further further identification as to how this particular field team started the the audit in the first place. [00:09:49] Speaker 00: And we believe that the record based on principles of administrative risk to the car in terms of a decided fact already that this positive factor applied in 2005 for his actions in 2005 that it only could have been. [00:10:01] Speaker 00: petitioner in this case, that alerted, or rather should say that the field team learned about this particular issue through petitioner's actions. [00:10:09] Speaker 00: And then the record also has a series of events after 2005, as we supplemented it, that the IRS engaged in internally with various field teams to actually expose this issue. [00:10:20] Speaker 00: And this is set forth in the appendix as well, Your Honor. [00:10:24] Speaker 02: So if we, if we don't buy the race to the cotton ocean, let's just, I take your position on that, but let's just assume for arguments purposes that we don't buy that. [00:10:31] Speaker 02: So the way that we get where you want us to get isn't predicated on what's happened in the other related cases that we're only looking at the record in this case. [00:10:41] Speaker 02: If we're, if we're confined to that, then did you satisfy your burden to try to get the, [00:10:50] Speaker 02: IRS and the tax court to look at how the team originally came into enough information that they launched the inquiry and that that, in fact, stemmed from petitioner. [00:11:06] Speaker 00: Your honor, we believe we did with supplementing the record with the administrative award determinations and the related cases, along with other information we obtained [00:11:15] Speaker 00: from the other cases, the administrative record in the other cases. [00:11:18] Speaker 00: So we believe we did submit that. [00:11:20] Speaker 00: We did participate. [00:11:21] Speaker 02: I see. [00:11:21] Speaker 02: I see. [00:11:21] Speaker 02: You submitted the other. [00:11:22] Speaker 02: So you could say, well, we submitted the other information, even if it's not race judicata or collateral stopper or something like that, even if these schemes don't work that way, it's still evidence as to how this team would have come in to. [00:11:33] Speaker 00: That's correct. [00:11:34] Speaker 00: No, don't come to know about it. [00:11:35] Speaker 00: And so we had a series of briefing on a motion to supplement. [00:11:38] Speaker 00: And so through a FOIA request and a request for the administrative determinations in the other cases, we were able to submit those. [00:11:46] Speaker 00: And then we also had possession of the administrative claim files and some other actions. [00:11:49] Speaker 00: And so the lower court agreed to supplement the record with our additional information so that we could build this factual record. [00:11:57] Speaker 00: We did not have a trial in this particular case, unlike in a related case, taxpayer 6544. [00:12:02] Speaker 00: If had there been a trial, then this is one of the issues that we would have [00:12:05] Speaker 00: sought to subpoena and for testimony, the field office and the whistleblower office as well to flesh out this actual factual issue. [00:12:19] Speaker 02: And then on the standard question, I just have one question under the statute. [00:12:23] Speaker 02: So I take your point that it says shall a couple of times, but one way to look at that is just to say that [00:12:29] Speaker 02: shall applies to the endpoints, so that it has to be between 15 and 30. [00:12:36] Speaker 02: But then in deciding the precise point along the continuum, that's not the type of thing that the tax court is going to second guess to the umpteenth degree when there's an analyst who's done a lot of work to figure out exactly where between those two endpoints the case might fall. [00:12:51] Speaker 02: What's wrong with it? [00:12:51] Speaker 02: Just as an intuitive matter, there's something to that. [00:12:53] Speaker 02: What's wrong with looking at it that way? [00:12:56] Speaker 00: I understand the question. [00:12:57] Speaker 00: I would offer that the statutory design provides the answer, and that there shall be a mandatory award. [00:13:05] Speaker 00: And that award shall be determined by the extent to which the individual's information contributed to that action. [00:13:13] Speaker 00: So the statute lays out two mandatory requirements, ultimately, provided that the $2 million threshold is met, provided there's a properly filed claim file. [00:13:20] Speaker 00: I believe that the actual computational framework in that analysis can be subjected to judicial review. [00:13:27] Speaker 00: under the de novo standard. [00:13:29] Speaker 00: So it's really evaluating the extent to which the individual substantially contributed to the action set forth under 7623B1. [00:13:39] Speaker 00: That is the precise question that the tax court can evaluate on a de novo standard. [00:13:43] Speaker 00: And certainly it can rely on the regulations, the computational framework, the assessment of the positive factors or not. [00:13:50] Speaker 00: And that analysis also can be subjected clearly to de novo review standard. [00:13:57] Speaker 02: My colleagues don't have additional questions for you. [00:13:59] Speaker 02: If not, we'll give you a little time for rebuttal. [00:14:01] Speaker 01: I have one question, which is, why didn't you raise the Appointments Clause argument in front of the tax court? [00:14:09] Speaker 00: Thank you, Your Honor. [00:14:11] Speaker 00: Perhaps we should have raised it before the tax court. [00:14:15] Speaker 00: But I believe the government here is confusing the issue of forfeiture of a claim versus the forfeiture of an argument in support of the claim. [00:14:22] Speaker 00: And our argument here is not that the Whistler office and the management [00:14:25] Speaker 00: and centralization of the whistleblower office arising in a 2006 act, or amendment, I should say, is somehow unconstitutional. [00:14:32] Speaker 00: It's simply that giving deference to principles of constitutional avoidance, when a whistleblower challenges an award determination, at that point in time, then that ultimate decision [00:14:46] Speaker 00: should be reviewed by a principal officer of the United States. [00:14:48] Speaker 00: So it's an argument. [00:14:50] Speaker 01: But this is a constitutional avoidance argument in service of your argument that the standard of review is to no. [00:14:55] Speaker 01: Correct. [00:14:56] Speaker 01: Thank you. [00:14:57] Speaker 01: Thank you. [00:14:57] Speaker 01: Thank you, Your Honor. [00:15:21] Speaker 02: So, thanks. [00:15:24] Speaker 03: Good morning. [00:15:24] Speaker 03: Thank you, Chief Judge. [00:15:26] Speaker 03: And may it please the court, I am Marie Wicks on behalf of the Commissioner of Internal Revenue. [00:15:31] Speaker 03: Section 7623B1 provides an award window of 15 to 30% of collected proceeds when the IRS proceeds with an administrative or judicial action based on information brought to the Secretary's attention by an individual. [00:15:49] Speaker 03: The statute also says that the determination of the amount of such award by the whistleblower office shall depend upon the extent to which the individual substantially contributed to such action. [00:16:02] Speaker 03: Here, there's no dispute that petitioner properly received an award under this statute. [00:16:08] Speaker 03: Rather, the issue in this case is whether the tax court [00:16:13] Speaker 03: properly sustain the 22% award determination made by the whistleblower office, which was squarely within the window of 15 to 30% and which was based on petitioners substantial contribution to an audit that had already been well underway when the audit team received petitioners information. [00:16:33] Speaker 02: Can I ask you this question? [00:16:35] Speaker 02: It sounds like everybody agrees that the audit was already underway. [00:16:39] Speaker 02: when the information came from the Senate. [00:16:41] Speaker 02: But let's just suppose, and there may be a factual dispute about this, but just put that aside for a second. [00:16:46] Speaker 02: Let's just suppose that the reason the audit was already underway is because the audit team came to know about this issue from Petitioner. [00:16:53] Speaker 02: It was information that Petitioner gave in the 2005, 2006 range, and that's what launched this whole thing. [00:17:00] Speaker 02: Let's just suppose that that's right. [00:17:01] Speaker 02: If that's true, then what would be the rationale for having a different [00:17:06] Speaker 02: level of, um, as between the 22 and 30%. [00:17:10] Speaker 02: What would be the rationale for doing something different in this case? [00:17:12] Speaker 02: If even though the inquiry is already underway, the reason was already underway. [00:17:17] Speaker 02: Circle back was because of something that petitioner supplied. [00:17:21] Speaker 03: Yes, your honor, assuming that that is the case, although the audit team was was insistent that they did not proceed based on [00:17:29] Speaker 03: whistleblower's pre-2008 information. [00:17:33] Speaker 02: So I want to hear about that, but let's just assume that it is, and then you can explain why the assumption is actually wrong. [00:17:39] Speaker 02: But if the assumption is right, then why isn't there something quite significant to the proposition that, well, at that point, then these all ought to be the same? [00:17:48] Speaker 03: Right. [00:17:48] Speaker 03: So this substantial contribution is the standard here. [00:17:54] Speaker 03: And the whistleblower analyst [00:17:57] Speaker 03: stated in his appendix, page 22, his award recommendation memorandum. [00:18:03] Speaker 03: He stated that the PSI report, which is the subcommittee investigation, included voluminous schedules that were provided by the target taxpayer to the PSI. [00:18:16] Speaker 03: And the information from the PSI database was reviewed and used to request information from the taxpayer through information [00:18:25] Speaker 03: document requests by the examiners. [00:18:29] Speaker 03: And then that was then used to determine the under withholding of the US tax. [00:18:35] Speaker 03: So that's another component of the degree to which the whistleblower's information [00:18:42] Speaker 03: contributed to the award amount. [00:18:46] Speaker 03: There was also a lot of information coming in from the taxpayer. [00:18:49] Speaker 02: I'm not sure I completely follow this, but to the extent that I do, are you saying that, are you just taking on the premise, which is that actually it wasn't the petitioner's information that caused the audit team to look into this? [00:19:00] Speaker 02: Is that what you just said is in service of? [00:19:04] Speaker 03: No, Your Honor. [00:19:04] Speaker 03: The subcommittee investigation report included [00:19:11] Speaker 03: information provided by the taxpayer as well. [00:19:15] Speaker 03: Although the whistleblower analysts did acknowledge that the petitioner here was the source of the permanent subcommittee information. [00:19:27] Speaker 02: I'm missing something basic then. [00:19:28] Speaker 02: Why are we looking at what the subcommittee supplied for purposes of the question that I posed to you? [00:19:32] Speaker 02: Because I think the question that I'm interested in, and if I shouldn't be interested in the question I'm interested in here, why not? [00:19:37] Speaker 02: But the question that I'm interested in is, [00:19:40] Speaker 02: Let's not look at what the subcommittee supplied to the IRS, because I understand that point. [00:19:48] Speaker 02: I think the question that's been raised by petitioner is, if you look at the distinction that was posed as the reason that this is 22%, whereas the other cases are 30, the distinction that was posed is that here, the inquiry was already underway. [00:20:02] Speaker 02: by the time the information came from the Senate. [00:20:05] Speaker 02: Whereas in the other cases, it wasn't. [00:20:07] Speaker 02: And that could be something, because it could make it sound like, well, the petitioner didn't do as much here as the petitioner had done in the other cases, because here the IRS was already onto it, and they were looking into it. [00:20:18] Speaker 02: But then if you look deeper and you say, well, the reason the IRS is already onto it was because it was something the petitioner supplied. [00:20:24] Speaker 02: Well, then that starts to break down. [00:20:25] Speaker 02: So at that point, I'm not sure I care about what came from the Senate. [00:20:29] Speaker 02: What I think care about is, why was the IRS already looking into this? [00:20:34] Speaker 02: And if that traces back to Petitioner 2, then it raises the question of, well, why doesn't the same 30% figure apply? [00:20:42] Speaker 02: And that's my question to you. [00:20:43] Speaker 02: If it's true, [00:20:45] Speaker 02: that the reason the IRS was already looking into it was because they got information from Petitioner, then why wouldn't it be the case that 30% should be the right figure here also, like in the other cases? [00:20:56] Speaker 03: The record reflects that the IRS audit team was looking into these issues prior to the 2008 submission of the whistleblower's information prior to January 2009 when the PSI information was forwarded to the audit team. [00:21:15] Speaker 03: So that the taxpayers form 1042 for withholding taxes from foreign entities. [00:21:22] Speaker 01: Can I ask this way? [00:21:23] Speaker 01: If there was a document in 2006 that said from someone else in the IRS to this team, this person has identified these two issues. [00:21:34] Speaker 01: You should look into them. [00:21:36] Speaker 01: And that's how this field team was onto these two issues before 2008. [00:21:40] Speaker 01: Then the whistleblower would be entitled, should have gotten 30%, right? [00:21:46] Speaker 03: Not necessarily. [00:21:47] Speaker 03: That would be material. [00:21:51] Speaker 03: But first, 7623B1, that framework applies to information brought to the secretary's attention after the effective date of the statute, which was December 20, 2006. [00:22:07] Speaker 03: So that's one. [00:22:10] Speaker 03: time frame difference, but also it is a substantial contribution. [00:22:15] Speaker 03: So there's not, um, it's not necessarily the case where the IRS was not, uh, yeah. [00:22:28] Speaker 01: My understanding of this, this decision is that it rests on a very specific factual finding. [00:22:33] Speaker 01: In this one case, as opposed to all the others, this field team was on to these two issues independent of any information from the whistleblower. [00:22:44] Speaker 01: That's what it says in footnote four. [00:22:45] Speaker 01: That's what it says at the end. [00:22:46] Speaker 01: That's the key factual finding, right? [00:22:48] Speaker 03: Yes, Your Honor. [00:22:49] Speaker 01: And I guess my question is, what is the support for that finding? [00:22:55] Speaker 03: There is the insistence from [00:22:58] Speaker 03: the audit team when the Whistler analyst received direction from his manager to expound upon why he was recommending a 22% award versus the 30%. [00:23:09] Speaker 03: So he went back to the audit team and asked them specifically why. [00:23:12] Speaker 01: This is where I get tripped up. [00:23:14] Speaker 01: So what he asks is, did you start the exam? [00:23:20] Speaker 01: independent of whistleblower information, they say, yes. [00:23:24] Speaker 01: And the analyst realizes there could be a problem. [00:23:27] Speaker 01: And he asks, were there other issues in the exam? [00:23:31] Speaker 01: And they say, yes. [00:23:32] Speaker 01: So it's still entirely unclear whether they were looking in. [00:23:37] Speaker 01: In other words, those emails do not answer the question, were you looking into these two issues independent of the whistleblower? [00:23:43] Speaker 01: They say, we had started an audit into the company for those years. [00:23:49] Speaker 01: independent of the whistleblower information. [00:23:52] Speaker 01: Do you see what I'm getting at? [00:23:53] Speaker 01: There's actually not a statement that they were onto those two issues independent of the whistleblower. [00:23:59] Speaker 03: I understand that. [00:24:00] Speaker 03: And in addition to the emails with audit team, there are also the examiner's risk analysis worksheet and also the lead sheets for the examination. [00:24:12] Speaker 03: And those are [00:24:16] Speaker 03: in Supplemental Appendix 168. [00:24:20] Speaker 01: And then I think those read favorably to the analyst, those do establish that the team was looking into those two issues before 2009. [00:24:30] Speaker 01: Granted, they do not answer how they were looking into those two issues. [00:24:37] Speaker 01: And again, if you step back, and I think it is undisputed that the finding here is this one team [00:24:44] Speaker 01: in contrast to the entire IRS, and in contrast to every other field team, somehow was on to these two issues independent of the whistleblower. [00:24:54] Speaker 01: I would be looking for something that affirmatively answers that question. [00:24:58] Speaker 01: In fact, I think the analyst was looking for something affirmative. [00:25:02] Speaker 01: And I'm not sure if he received it. [00:25:05] Speaker 01: So again, I'm sorry. [00:25:06] Speaker 01: I know. [00:25:06] Speaker 01: Maybe I'm. [00:25:07] Speaker 03: Right. [00:25:08] Speaker 01: One other. [00:25:09] Speaker 01: What is the affirmative indication they found it independent of the whistleblower's information? [00:25:14] Speaker 03: One other piece of statements in the record appendix, page 186, is the timeline of the petitioner. [00:25:25] Speaker 03: And that actually came from the administrative record in one of his other claims. [00:25:31] Speaker 03: And it states in there that the IRS stated that currently 12 audit teams have access to the PSI documents, but none of the earlier [00:25:43] Speaker 03: petitioner submissions were sent to the field. [00:25:46] Speaker 03: So that's an additional confirmation that his earlier information was not actually given to an exam team. [00:25:55] Speaker 03: Do you have a citation for that? [00:25:57] Speaker 03: It's Appendix 186. [00:25:59] Speaker 02: Is that the top bullet? [00:26:01] Speaker 02: First bullet up? [00:26:02] Speaker 02: Is that the one you're looking at? [00:26:03] Speaker 03: It is. [00:26:04] Speaker 03: I don't have the exact page in front of me, but I believe it's [00:26:13] Speaker 03: Midway down, I can. [00:26:22] Speaker 02: There we go. [00:26:23] Speaker 02: It's a first bullet. [00:26:23] Speaker 03: It's a one, two, three, four, fifth bullet, the October 26th, 2009. [00:26:29] Speaker 02: Is it based on the same quote that's in the first one, which is? [00:26:34] Speaker 02: None of the earlier petitioner submissions were sent to the field. [00:26:41] Speaker 02: Is that the part you're relying on? [00:26:43] Speaker 03: Yes, Your Honor. [00:27:00] Speaker 01: So would you be you would be saying you would combine this with just the simple fact the risk analysis and that the call log that show the team was looking into these issues and that that's enough to support the. [00:27:14] Speaker 03: Yes your honor and our brief lays out. [00:27:18] Speaker 03: The several instances in the record that would support that and the. [00:27:26] Speaker 03: the transcript of the taxpayer as well shows when the tax year was opened for audit. [00:27:34] Speaker 03: So June 2006 was when the 2003 tax year was opened. [00:27:40] Speaker 03: And then I believe March 2008 is when 2004, 2005 tax years were opened for audit. [00:27:50] Speaker 03: And those are [00:27:53] Speaker 03: Subliminal appendix. [00:27:54] Speaker 02: Would you agree so this goes to whether, in fact, the audit team started looking into this for reasons independent of anything supplied by petitioner? [00:28:04] Speaker 02: And I think if that's true that that's what happened, then that's the basis for 22% in this case, 30% in the others. [00:28:12] Speaker 02: Would you agree with the converse that if it were true that the reason the audit team started looking into this was also because of information supplied by petitioner, although information supplied by petitioner in an earlier time, then there wouldn't be a reason to draw a distinction between this case and the prior ones and that 30% should be the figure in all the cases. [00:28:34] Speaker 03: Your honor, I would not say definitively that if that were true, then it would automatically be 30%. [00:28:42] Speaker 03: That's the statutory maximum. [00:28:46] Speaker 03: And the consideration is substantial contribution and not but for. [00:28:53] Speaker 02: So right. [00:28:54] Speaker 02: OK, so I'm going to assume that it wouldn't. [00:28:55] Speaker 03: But that is a material difference. [00:28:57] Speaker 02: But for is pretty substantial, usually. [00:28:58] Speaker 02: I mean, if it wouldn't have happened at all without it, then that seems like a fairly substantial contribution. [00:29:05] Speaker 03: It carries weight. [00:29:06] Speaker 02: Yeah. [00:29:07] Speaker 03: Yes, Your Honor. [00:29:08] Speaker 03: And so here, the analyst did [00:29:12] Speaker 03: ensure that he made this award recommendation consistent with the other award recommendations by taking into account the fact that this audit had been well underway. [00:29:24] Speaker 03: They were looking into these issues before receiving the whistleblower's information. [00:29:28] Speaker 03: And all that this court needs to decide here is whether the tax court properly sustained the whistleblower's 22% award determination, the statute [00:29:41] Speaker 03: clearly states that the determination of the amount of the award by the whistleblower office shall depend upon the extent to which the individual substantially contributed. [00:29:52] Speaker 03: So that window of determination is up to the whistleblower office who has access to the administrative record to determine based on its own discretion there. [00:30:09] Speaker 01: There are no further questions. [00:30:12] Speaker 01: Just one last question. [00:30:22] Speaker 01: I guess all that would be left, if this on 186 establishes that the field team didn't receive anything from within the IRS, the only thing left would be [00:30:37] Speaker 01: Sorry, that would have tipped them off to these issues before receiving the PSI information. [00:30:42] Speaker 01: The only thing left would have been the Wall Street Journal article. [00:30:45] Speaker 01: And I suppose you would say that he'd be that would be pretty speculative to think that the team was on to these issues because of the Wall Street Journal article. [00:30:54] Speaker 03: Right. [00:30:54] Speaker 03: And I think the whole universe of these documents showing that the exam team was looking into the [00:31:07] Speaker 03: withholding issues before receiving the information as a universe that contributes to the analyst's conclusion that the substantial contribution in this case was less than that in the other cases where the IRS was alerted to the identification of the taxpayers and collected based on that, which weren't to the 30% in those situations. [00:31:38] Speaker 02: Okay, thank you, Council. [00:31:40] Speaker 02: Mr. Wright, we'll give you three minutes for rebuttal, and I'm sure you'll tell us your view on the language for this public point. [00:31:58] Speaker 00: Yes, yes. [00:31:58] Speaker 00: Thank you, Your Honor. [00:31:59] Speaker 00: It is part of that. [00:32:00] Speaker 00: Absolutely. [00:32:01] Speaker 00: And Judge Garcia, if I may, at Appendix 184, this actually starts the timeline of events according to the records maintained by the whistleblower office, of the sum records in the whistleblower office. [00:32:14] Speaker 00: And in bulletized format, it actually identifies beginning in June of 2005. [00:32:20] Speaker 00: This is when the whistleblowing activities begin. [00:32:22] Speaker 00: This is a government-produced document. [00:32:24] Speaker 00: I will note, this is set out on brief, but in fact, the underlying claim file, underlying Form 211 at issue is not actually 2008, it's actually March 2006. [00:32:33] Speaker 00: We proffer that as part of the supplemental motion. [00:32:35] Speaker 00: Certainly appreciate all that. [00:32:36] Speaker 01: Isn't the bullet on 186 then says, but the field team didn't have access to any of that? [00:32:41] Speaker 00: If I can point you, alert your attention to appendix 184, the bullet point starting with May 16, 2006. [00:32:49] Speaker 00: you'll see that there was an IRS meeting in New York to discuss the whistleblower's submission. [00:32:53] Speaker 00: And attendance were representatives from CID, CT council, and LM field. [00:32:59] Speaker 00: So we have every reason to believe that field team members were present at that meeting. [00:33:03] Speaker 00: And I believe there's also another document within the appendix that actually has the list of attendees at that particular meeting by position title. [00:33:12] Speaker 00: So there are factual issues here. [00:33:15] Speaker 02: There's your position on the language that [00:33:18] Speaker 02: that the government's counsel pointed to is that that language is just wrong, or do you have an answer to even underline? [00:33:26] Speaker 00: Your Honour, I'm suggesting that, in fact, a field team was involved as early as 2006 with a debrief with the IRS, with various components of the IRS to discuss the supplier's information. [00:33:38] Speaker 00: So there certainly is a factual issue concerning the ultimate question [00:33:42] Speaker 00: Judge Shehnavasan that you asked is, why was the IRS looking at this? [00:33:46] Speaker 00: And then how did the IRS begin to look at this? [00:33:50] Speaker 00: And so these are factual issues that still remain. [00:33:53] Speaker 00: And I understand the distinction. [00:33:54] Speaker 00: This case, according to the whistleblower office, is different because there's a claim that it began not based on the whistleblower's information. [00:34:01] Speaker 00: But there is significant evidence that we've proffered to the record before the whistleblower office that suggests that, in fact, the whistleblower was the source of the information. [00:34:13] Speaker 00: And I believe, Your Honors, that the way to resolve this issue is that if the tax court has de novo review, then it has plenary authority to address this question, to make findings of facts, to make conclusions of law, and to really analyze and assess this fact-based issue. [00:34:29] Speaker 01: Can I ask, for this document that we're looking at, the timeline of events, is that something that was before the analyst, or was this part of your motion to supplement before the tax court? [00:34:40] Speaker 00: The information generally, Your Honor, in terms of the initiation 2005, this document should have been before the analyst because he was part of all the claim files that were involved. [00:34:52] Speaker 00: But it was not part of the administrative record. [00:34:54] Speaker 00: If memory serves correct, I believe this was part of our supplement that we tendered as part of the briefing. [00:35:00] Speaker 00: Supplement to the tax court? [00:35:02] Speaker 02: Yes, Your Honor. [00:35:06] Speaker 02: If no further questions, Your Honor. [00:35:08] Speaker 02: I don't think so. [00:35:09] Speaker 02: All right. [00:35:09] Speaker 02: Thank you very much. [00:35:10] Speaker 02: Thank you, counsel. [00:35:10] Speaker 02: Thank you to both counsel. [00:35:12] Speaker 02: Take this case Anderson.