                                      KENNETH WILLIAM KASPER, PETITIONER v. COMMISSIONER                                              OF
                                                 INTERNAL REVENUE, RESPONDENT
                                                        Docket No. 13399–10W.                      Filed July 12, 2011.

                                                 On Jan. 29, 2009, P filed with R a claim for a whistleblower
                                               award under sec. 7623(b)(4), I.R.C., implicating a public cor-
                                               poration and its CEO. R bifurcated P’s whistleblower claim
                                               into a claim for the corporation and another for its CEO. On
                                               June 19, 2009, R purportedly issued a letter for each claim,
                                               denying both on the basis that P did not meet the appropriate
                                               criteria for an award under sec. 7623(b), I.R.C. On May 3,
                                               2010, P contacted R about the status of his whistleblower
                                               claim. His letter referenced only the claim implicating the
                                               CEO. On May 24, 2010, R responded by sending P a copy of
                                               the denial letter pertaining to the claim as to the CEO. On
                                               June 14, 2010, P filed a petition with this Court seeking
                                               review of R’s denial of the whistleblower claim as to the CEO.
                                               R filed a motion to dismiss this case for lack of jurisdiction
                                               on two grounds: First, that no determination under sec.
                                               7623(b), I.R.C., was made; and, second, if we find that a deter-
                                               mination was made, that P failed to petition this Court within
                                               30 days as required by sec. 7623(b)(4), I.R.C. P argues that he
                                               did not receive a determination pursuant to sec. 7623(b)(4),
                                               I.R.C., with respect to the corporate claim. Further, P argues
                                               that he did not receive a determination with respect to the
                                               claim implicating the CEO until May 24, 2010. Because he

                                                                                                                                      37




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                                                    filed his petition on June 14, 2010, he argues that he has met
                                                    the 30-day requirement of sec. 7623(b)(4), I.R.C., giving this
                                                    Court jurisdiction as to the claim implicating the CEO. Held:
                                                    In accordance with our decision in Cooper v. Commissioner,
                                                    135 T.C. 70 (2010), each Whistleblower Office letter that
                                                    denies a whistleblower claim is a determination within the
                                                    meaning of sec. 7623(b)(4), I.R.C. Held, further, R must prove
                                                    by direct evidence the date and fact of mailing of the deter-
                                                    mination to the whistleblower. Magazine v. Commissioner, 89
                                                    T.C. 321, 326 (1987). Held, further, the 30-day period of sec.
                                                    7623(b)(4), I.R.C., within which a whistleblower must file a
                                                    petition in response to a Whistleblower Office determination,
                                                    begins on the date of mailing of the determination by the
                                                    Whistleblower Office. Held, further, P filed his petition with
                                                    this Court within the 30-day period specified by sec.
                                                    7623(b)(4), I.R.C., and we shall deny R’s motion to dismiss for
                                                    lack of jurisdiction.

                                            Kenneth William Kasper, pro se.
                                            John T. Kirsch, for respondent.
                                                                                     OPINION

                                        HAINES, Judge: This case is before the Court on respond-
                                      ent’s motion to dismiss for lack of jurisdiction. The two issues
                                      before us are: (1) Whether a letter denying petitioner’s
                                      whistleblower claim constitutes a ‘‘determination’’ within the
                                      meaning of section 7623(b)(4); 1 and (2) if it does, whether
                                      petitioner filed a petition with this Court ‘‘within 30 days of
                                      such determination’’ to establish subject matter jurisdiction.

                                                                                  Background
                                         Petitioner resided in Arizona at the time he filed his peti-
                                      tion.
                                         On January 29, 2009, petitioner filed a Form 211, Applica-
                                      tion for Award for Original Information (whistleblower
                                      claim), with respondent’s Whistleblower Office (Whistle-
                                      blower Office). Petitioner’s whistleblower claim provided
                                      information alleging that a public corporation and its CEO
                                      failed to pay required overtime and failed to withhold
                                      employment taxes with respect to that overtime.
                                         The Whistleblower Office bifurcated petitioner’s whistle-
                                      blower claim into a claim for the corporation (corporate
                                      claim) and one for the CEO (CEO claim) and assigned each a
                                           1 All   section references are to the Internal Revenue Code of 1986, as amended.




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                                      (37)                           KASPER v. COMMISSIONER                                          39


                                      separate claim number. On April 10, 2009, the Whistleblower
                                      Office sent petitioner a separate letter for each claim which
                                      informed him that the claims were being evaluated to deter-
                                      mine whether an investigation was warranted and a reward
                                      was appropriate.
                                         On June 19, 2009, the Whistleblower Office denied both
                                      claims. A denial letter was prepared for each claim. Each
                                      denial letter explained that the Whistleblower Office had
                                      reviewed and evaluated petitioner’s claim and determined
                                      that the information he provided did not meet the appro-
                                      priate criteria for an award. The denial letters also stated
                                      that Federal disclosure and other prevailing laws prevented
                                      the Whistleblower Office from providing a specific expla-
                                      nation for the denials. Consequently, the denial letters
                                      recited a boilerplate list of common reasons for not allowing
                                      an award, including: (1) The application provided insufficient
                                      information; (2) the information provided did not result in
                                      the recovery of taxes, penalties, or fines; or (3) the Internal
                                      Revenue Service (IRS) already had the information provided
                                      or such information was available in public records.
                                         The only direct evidence of the date when petitioner was
                                      notified of the denial of his whistleblower claim was a letter
                                      sent by the Whistleblower Office in response to an inquiry by
                                      petitioner. On May 3, 2010, petitioner notified the Whistle-
                                      blower Office that the public corporation implicated had
                                      made a settlement payment to the IRS. In the May 3 letter,
                                      petitioner asked when he could expect notification that the
                                      information he provided met the appropriate criteria for an
                                      award. Petitioner’s letter referenced the claim number
                                      assigned to the CEO claim, not to the corporate claim. On
                                      May 24, 2010, the Whistleblower Office responded by sending
                                      petitioner a copy of the denial letter dated June 19, 2009, for
                                      the CEO claim. A copy of the denial letter for the corporate
                                      claim was not provided. On June 14, 2010, petitioner filed
                                      his petition for a whistleblower action with this Court pursu-
                                      ant to section 7623(b)(4) seeking review of respondent’s
                                      denial of the whistleblower claim as to the CEO.
                                         During the time relevant to this case, the standard prac-
                                      tice within the Whistleblower Office was to prepare a denial
                                      letter and scan it into e-Trak, the Whistleblower Office’s com-




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                                      puter database. 2 Thereafter, history notes were written or
                                      typed, dated, and then entered into e-Trak as an investiga-
                                      tion history report. A copy of the denial letter was placed in
                                      a paper file.
                                         Standard mailing procedures for denial letters required
                                      that the original denial letter be placed by a clerk in an
                                      envelope addressed to the whistleblower claimant at his or
                                      her last known address and deposited in the Whistleblower
                                      Office’s outgoing mail. At the end of each day, a clerk took
                                      the outgoing mail to the facilities mailroom, where mail was
                                      picked up daily for delivery by the U.S. Postal Service. None
                                      of the letters were sent by certified or registered mail, and
                                      a mailing log was not kept.
                                         The e-Trak system and the investigation history reports
                                      indicate that the Whistleblower Office’s standard procedures
                                      were followed in petitioner’s case. 3 Moreover, the denial let-
                                      ters were addressed to petitioner at his last known address
                                      and were not returned to the Whistleblower Office by the
                                      U.S. Postal Service as undeliverable.

                                                                                Discussion
                                         We are asked to decide: (1) Whether a letter denying peti-
                                      tioner’s whistleblower claim constitutes a ‘‘determination’’
                                      within the meaning of section 7623(b)(4); and (2) if it does,
                                      whether petitioner filed a petition with this Court ‘‘within 30
                                      days of such determination’’ pursuant to section 7623(b)(4) to
                                      give this Court subject-matter jurisdiction.
                                         The Tax Court is a court of limited jurisdiction and may
                                      exercise its jurisdiction only to the extent authorized by Con-
                                      gress. Judge v. Commissioner, 88 T.C. 1175, 1180–1181
                                      (1987); Naftel v. Commissioner, 85 T.C. 527, 529 (1985). The
                                      Tax Court is without authority to enlarge upon that statu-
                                      tory grant. See Phillips Petroleum Co. v. Commissioner, 92
                                      T.C. 885, 888 (1989). We nevertheless have jurisdiction to
                                      determine whether we have jurisdiction. Hambrick v.
                                      Commissioner, 118 T.C. 348 (2002); Pyo v. Commissioner, 83
                                         2 Bradley DeBerg, supervisor of the Whistleblower Office in Ogden, Utah, provided the infor-

                                      mation relating to standard practice by means of a declaration in support of respondent’s motion
                                      to dismiss for lack of jurisdiction.
                                         3 The date on petitioner’s denial letters is June 19, 2009, yet the investigation history reports

                                      provide a date of June 18, 2009. DeBerg explained this discrepancy by saying that it is likely
                                      that a clerk in the Whistleblower Office mistakenly used the wrong date stamp on the investiga-
                                      tion history reports.




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                                      (37)                           KASPER v. COMMISSIONER                                          41


                                      T.C. 626, 632 (1984); Kluger v. Commissioner, 83 T.C. 309,
                                      314 (1984).
                                        Congress enacted section 7623(b)(4) as part of the Tax
                                      Relief and Health Care Act of 2006, Pub. L. 109–432, div. A,
                                      sec. 406, 120 Stat. 2958 (effective Dec. 20, 2006). Section
                                      7623(b)(4) provides:
                                        (4) APPEAL OF AWARD DETERMINATION.—Any determination regarding an
                                      award under paragraph (1), (2), or (3) may, within 30 days of such deter-
                                      mination, be appealed to the Tax Court (and the Tax Court shall have
                                      jurisdiction with respect to such matter).

                                      Section 7623(b)(4) clearly provides that: (1) The whistle-
                                      blower claimant has a right to appeal any determination
                                      made by the Whistleblower Office; (2) he or she must appeal
                                      within a 30-day period; and (3) the Tax Court has jurisdic-
                                      tion to hear the appeal. The jurisdiction of the Court is
                                      dependent upon a finding that a determination has been
                                      made and a finding that the appeal from the determination
                                      is timely. However, the statute does not clearly define the
                                      term ‘‘determination’’ or the date on which the 30-day period
                                      begins.
                                      A. Determination
                                        Respondent argues that there has been no determination
                                      with respect to either of petitioner’s claims because the
                                      information provided was not used to detect underpayments
                                      of tax or to collect proceeds. Respondent argues that there
                                      can be a determination on which an appeal to the Tax Court
                                      can be based only if the Whistleblower Office undertakes an
                                      administrative or judicial action and thereafter determines to
                                      make an award.
                                        We recently decided this issue in Cooper v. Commissioner,
                                      135 T.C. 70 (2010). Faced with identical arguments from the
                                      Commissioner in Cooper, we held that a letter rejecting a
                                      whistleblower claim constitutes a determination within the
                                      meaning of section 7623(b)(4) because it is a final adminis-
                                      trative decision. We see no reason not to follow our holding
                                      in Cooper. Here the denial letter from the Whistleblower
                                      Office states that petitioner is not entitled to an award. It is
                                      a final administrative decision. Accordingly, we find that
                                      each of the June 19, 2009, denial letters constitutes a deter-
                                      mination within the meaning of section 7623(b)(4).




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                                      B. Timeliness
                                         In 2006 the Tax Court was given jurisdiction to hear
                                      appeals of determinations under the whistleblower statute
                                      (section 7623(b)(4)) and the lien and levy statute (section
                                      6330(d)). Both statutes use similar language to describe the
                                      period within which a person may appeal an adverse deter-
                                      mination to the Tax Court. Section 7623(b)(4) provides that
                                      an appeal must be filed ‘‘within 30 days of such determina-
                                      tion’’, while section 6330(d) provides that an appeal must be
                                      filed ‘‘within 30 days of a determination under this section’’.
                                      Neither statute expressly provides that the determination
                                      must be communicated to the person subject to the deter-
                                      mination. Yet Congress clearly intended to provide a whistle-
                                      blower with due process; i.e., notice and an opportunity to be
                                      heard. Requiring the Whistleblower Office to provide the
                                      whistleblower with notice of the determination is the logical
                                      first step to establish the starting date for the period of
                                      appeal. 4 Otherwise, the IRS could delay notifying the claim-
                                      ant until 30 days after the determination is issued and
                                      thereby deprive a claimant of any appeal rights.
                                         When considering notice requirements in lien and levy
                                      cases, we have held in Weber v. Commissioner, 122 T.C. 258,
                                      261–262 (2004):
                                        Although section 6330(d) does not specify the means by which the
                                      Commissioner is required to give notice of a determination made under
                                      sections 6320 and 6330, we conclude that the method that Congress
                                      specifically authorized for sending notices of deficiency in section 6212(a)
                                      and (b) certainly should suffice. Accordingly, we hold that a notice of deter-
                                      mination issued pursuant to sections 6320 and/or 6330 is sufficient if such
                                      notice is sent by certified or registered mail to a taxpayer at the taxpayer’s
                                      last known address. * * *

                                      The Secretary promulgated detailed regulations for lien and
                                      levy cases to establish that notices of determination must be
                                      mailed by certified or registered mail, must set forth the
                                      Office of Appeals’ findings and decisions, and must advise the
                                      taxpayer of the taxpayer’s right to seek judicial review. 5
                                        4 Every other statute invoking the jurisdiction of the Court requires the Commissioner to mail

                                      a written notice or determination, usually by certified or registered mail, or to personally deliver
                                      the notice or determination, to establish the starting date of the period of appeal. See, e.g., secs.
                                      6015(e)(1)(A)(i)(I), 6110(f), 6213(a), 6226(a), 6247(a), 6404(h).
                                        5 Sec. 301.6330–1(e)(3), Q&A E8, E10, Proced. & Admin. Regs. The regulations provide incon-

                                      sistent starting dates (E8, within 30 days of the date of the notice of determination; E10, within




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                                      (37)                           KASPER v. COMMISSIONER                                          43


                                        In contrast, for whistleblower cases, the IRS issued internal
                                      guidance governing the Whistleblower Office’s operations.
                                      Internal Revenue Manual (IRM) pt. 25.2.2, Whistleblower
                                      Awards. IRM pt. 25.2.2.13 (Dec. 30, 2008), in effect for the
                                      date the denial letters were issued in this case, stated:
                                      Once the Whistleblower Office has made a final determination regarding
                                      a claim, the Whistleblower Office will communicate the determination, in
                                      writing, to the claimant. Final Whistleblower Office determinations
                                      regarding awards under section 7623(b) may, within 30 days of such deter-
                                      mination, be appealed to the United States Tax Court. In accordance with
                                      section 7623(b)(4), decisions under section 7623(a) may not be appealed to
                                      the Tax Court.

                                      The guidance was silent as to when and how the communica-
                                      tion had to be sent. 6
                                         We hold that the Commissioner must demonstrate either
                                      mailing or personal delivery of a denial letter to the whistle-
                                      blower’s last known address.
                                           1. The Arguments
                                        The denial letters are dated June 19, 2009. Petitioner filed
                                      his petition with the Court on June 14, 2010, 360 days later.
                                      Petitioner’s petition references only the denial letter for the
                                      CEO claim. Petitioner argues that he did not receive a denial
                                      letter in reference to the corporate claim. Petitioner further
                                      argues that he did not receive a denial letter in reference to
                                      the CEO claim until May 24, 2010, when the Whistleblower
                                      Office sent him a copy of the June 19, 2009, letter in
                                      response to his request for information on the status of his
                                      whistleblower claim. Accordingly, petitioner argues that his
                                      petition with respect to the CEO claim is timely and that he
                                      has yet to receive a determination with respect to the cor-
                                      porate claim.
                                      the 30-day period commencing the day after the date of notice of determination). The inconsist-
                                      ency has not been the subject of litigation to date.
                                        6 On June 18, 2010, the IRM was revised. Revised IRM pt. 25.2.2.10 states:


                                      Once the Whistleblower Office has made a final determination regarding a claim under
                                      7623(b)(1), (2), or (3), the Whistleblower Office will communicate the determination, in writing
                                      via certified mail, to the claimant. Final Whistleblower Office determinations regarding awards
                                      under section 7623(b)(1), (2) and (3) may, within 30 calendar days of such determination, be ap-
                                      pealed to the United States Tax Court, 400 Second Street, NW, and Washington DC 20217. The
                                      IRS does not have the authority to extend the period for filing an appeal. In accordance with
                                      section 7623(b)(4), decisions under section 7623(a) may not be appealed to the Tax Court.
                                      The certified mail requirement, however, was not in effect for the date the denial letters were
                                      issued in this case and is therefore not applicable.




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                                         Respondent argues that the denial letters were mailed to
                                      petitioner on June 19, 2009, the date they were prepared,
                                      and, therefore, petitioner’s 30-day window to appeal the
                                      denial letters began on that date. Because no appeal was
                                      filed as to the corporate claim and the appeal on the CEO
                                      claim was filed outside the 30-day period, respondent argues
                                      that we are without jurisdiction to review the determina-
                                      tions.
                                           2. Findings and Holding
                                         The Government is generally entitled to a rebuttable
                                      presumption of delivery upon presentation of evidence of
                                      proper mailing. See Hagner v. United States, 285 U.S. 427,
                                      430 (1932); Godfrey v. United States, 997 F.2d 335, 338 (7th
                                      Cir. 1993); Doolin v. United States, 918 F.2d 15 (2d Cir.
                                      1990). Although the Whistleblower Office did not have a cer-
                                      tified mailing requirement at the time the denial letters were
                                      issued, respondent argues there is a strong inference of
                                      delivery when it is shown that the Whistleblower Office com-
                                      plied with its internal procedures for mailing of the denial
                                      letters in the regular course of its operations. See Mahon v.
                                      Credit Bureau of Placer Cy. Inc., 171 F.3d 1197 (9th Cir.
                                      1999); Godfrey v. United States, supra; Gonzales Packing Co.
                                      v. East Coast Brokers & Packers, Inc., 961 F.2d 1543, 1545
                                      (11th Cir. 1992); McClaskey v. Commissioner, T.C. Memo.
                                      2008–147. A strong inference must arise from more than
                                      unsupported conclusory statements of an individual based on
                                      his assumption of how mail was handled in the normal
                                      course of business in his office. See Gonzales Packing Co. v.
                                      E. Coast Brokers & Packers, Inc., supra at 1545; Leasing
                                      Associates, Inc. v. Slaughter & Son, Inc., 450 F.2d 174, 178
                                      (8th Cir. 1971).
                                         Respondent argues that the standard operating procedures
                                      within the Whistleblower Office were followed to prove that
                                      the denial letters were mailed. The Whistleblower Office’s e-
                                      Trak system was described. The e-Trak system is a computer
                                      record which indicates that a denial letter was sent but does
                                      not confirm where it was sent, to whom it was sent, or
                                      whether it was a part of the Whistleblower Office’s outgoing
                                      mail.




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                                      (37)                           KASPER v. COMMISSIONER                                           45


                                         Nor was there a mailing log. In McClaskey v. Commis-
                                      sioner, supra, we held that mailing logs showing a taxpayer’s
                                      name and last known address, confirmation that the log was
                                      reviewed for accuracy, and the testimony of an agent familiar
                                      with the IRS’ mailing procedures were sufficient to prove that
                                      a notice of beginning of administrative proceeding had been
                                      mailed. Respondent has not presented similar mailing logs or
                                      any other direct evidence that the denial letters were prop-
                                      erly mailed to petitioner on June 19, 2009.
                                         Although evidence of standard practice will be afforded
                                      appropriate weight as the circumstances of each case require,
                                      we cannot find that compliance with standard practices
                                      within the Whistleblower Office, standing alone, permits a
                                      finding that the denial letters in question were mailed to
                                      petitioner on June 19, 2009. The date a determination is
                                      mailed is of critical importance to establish our jurisdiction
                                      to review a taxpayer’s case. We will hold we do not have
                                      jurisdiction when a taxpayer does not meet the 30-day
                                      requirement. And as we have emphasized in cases involving
                                      our jurisdiction: ‘‘In this setting, we must require * * * [the
                                      Commissioner] to prove by direct evidence the date and fact
                                      of mailing the notice to a taxpayer.’’ Magazine v. Commis-
                                      sioner, 89 T.C. 321, 326 (1987).
                                         We hold that the 30-day period of section 7623(b)(4) within
                                      which a whistleblower must file a petition in response to a
                                      Whistleblower Office determination begins on the date of
                                      mailing or personal delivery of the determination to the
                                      whistleblower at his last known address. We further hold
                                      that the Commissioner must prove by direct evidence the
                                      date and fact of mailing or personal delivery of the notice to
                                      the whistleblower. Respondent failed to prove that the denial
                                      letters were properly mailed to petitioner on June 19, 2009.
                                      The denial letter for the CEO claim, however, was mailed on
                                      May 24, 2010. Petitioner filed his petition with the Court on
                                      June 14, 2010. Accordingly, petitioner timely filed his peti-
                                      tion with respect to the CEO claim. 7
                                         In reaching these holdings, the Court has considered all
                                      arguments made and, to the extent not mentioned, concludes
                                      that they are moot, irrelevant, or without merit.
                                        7 With respect to the denial letter on the corporate claim, there is no direct evidence of mailing

                                      and, therefore, the time has yet to begin in which petitioner may file a petition as to that claim
                                      pursuant to sec. 7623(b)(4).




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                                      46                 137 UNITED STATES TAX COURT REPORTS                                         (37)


                                       For the foregoing reasons, we will deny respondent’s
                                      motion to dismiss as to the CEO claim.
                                                                                 An appropriate order will be issued.
                                                                               f




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