Court Says Serial IRS Whistleblower Claimant Cannot Remain Anonymous

Court Says Serial IRS Whistleblower Claimant Cannot Remain Anonymous

In Whistleblower 14377-16W v. Commissioner, 148 T.C. 25, the U.S. Tax Court concluded that a whistleblower claimant could not remain anonymous when litigating his claim in court. This case is one all whistleblowers should read and fully understand as it could result in their identity being made public.

The Facts

The abbreviated facts are as follows: The claimant is a retired CPA. He inspected publicly available SEC filings for companies that owned restaurants. He identified several companies that he believed had not reported the tax correctly associated with gift card programs. The claimant had filed somewhere between twenty and fifty claims–several of which were denied by the IRS and were being considered by the U.S. Tax Court.

The Whistleblower Program

The whistleblower program was created by Congress to incentivize people to report tax cheats. The ability to remain anonymous is at the heart of the whistleblower program. As the court notes in the Whistleblower 14377-16W case, the ability to remain anonymous is not absolute. This is particularly true if the claimant uses the courts to order the IRS to honor a claim denied by the IRS.

Litigating a Whistleblower Claim

As the court put it, “will permit a whistleblower to proceed anonymously if the whistleblower presents a sufficient showing of potential harm that outweighs counterbalancing societal interests in knowing the whistleblower’s identity.” This societal interest is the interest in knowing who is using the courts and what they are using them for.

Remaining Annonymous in Court

The court opinion provides a summary of the prior cases in which the court allowed whistleblower claims to remain anonymous in court. The cases involved situations where the claimants had asserted that they would suffer physical harm if their whistleblower activity was discovered. Some even alleged receiving death threats. Another case involved an employee who reported his employer. The court had found that the disclosure of his identity would negatively impact his ability to earn a living.

The facts in the Whistleblower 14377-16W were different. Specifically, the claimant had filed multiple claims for a number of different taxpayers. He was not tied to or related to the taxpayers. And his claims were based on the publicly available information.

The court considered these factors, along with the public’s need to know how “serial filers” are using the courts:

Unless we identify serial filers by name, the public will be unable to judge accurately the extent to which the serial filer phenomenon has affected the work of the Tax Court because the public would not know whether any particular petitioner of an adverse whistleblower determination had filed petitions appealing other adverse whistleblower determinations.

The Takeaway

The takeaway from this case is that would-be claimants need to consider how important the ability to remain anonymous is to them. If it is important, then they need to determine how their facts would square with this cases and the other cases cited in it. This court case could have a chilling effect on the number of whistleblower claims that are submitted.

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