                                                   WILLIAM PRENTICE COOPER, III, PETITIONER v.
                                                      COMMISSIONER OF INTERNAL REVENUE,
                                                                 RESPONDENT
                                               Docket Nos. 24178–09W, 24179–09W.                        Filed June 20, 2011.

                                                  P filed two claims for a whistleblower award with R under
                                               sec. 7623(b)(4), I.R.C., and R sent a letter to P denying the
                                               claims because an award determination could not be made
                                               under sec. 7623(b), I.R.C. We earlier denied R’s motion to dis-
                                               miss for lack of jurisdiction, holding that R’s letter was a
                                               determination conferring jurisdiction on this Court. Cooper v.
                                               Commissioner, 135 T.C. 70 (2010). R subsequently filed an
                                               answer to each petition P filed seeking review of R’s denial of
                                               the whistleblower claims. R attached a memorandum summa-
                                               rizing the facts, legal analysis and legal conclusion for R’s
                                               denials of P’s claims. R moves for summary judgment. P
                                               objects, asking us to undertake a complete re-evaluation of
                                               the facts and take whatever steps are necessary to detect an
                                               underpayment of tax. Held: Our jurisdiction in whistleblower
                                               cases does not include opening an administrative or judicial
                                               action to predetermine the tax liability. P failed to meet the
                                               threshold requirements for a whistleblower award.

                                           Joseph G. Giannola and Robert J. Mauceri, for petitioner.
                                           Holly H. Styles and Alex Shlivko, for respondent.

                                                                                  OPINION

                                        KROUPA, Judge: These cases are before the Court on
                                      respondent’s motions for summary judgment filed pursuant

                                                                                                                                     597




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                                      598                136 UNITED STATES TAX COURT REPORTS                                         (597)


                                      to Rule 121. 1 Respondent contends that he is entitled to
                                      summary judgment as a matter of law because petitioner has
                                      not met the threshold requirements for a whistleblower
                                      award under section 7623(b). We shall grant respondent’s
                                      motions.

                                                                               Background
                                         The following information is stated for purpose of resolving
                                      the pending motions. At the time of filing the petitions, peti-
                                      tioner resided in Nashville, Tennessee.
                                         Petitioner, an attorney, submitted two Forms 211, Applica-
                                      tion for Award for Original Information (whistleblower
                                      claims), to the Internal Revenue Service (IRS) in 2008 con-
                                      cerning alleged violations of the Code. He alleged in the two
                                      claims that certain parties had failed to pay millions of dol-
                                      lars in estate and generation-skipping transfer tax. Peti-
                                      tioner alleged in one claim that a trust having over $102 mil-
                                      lion in assets was improperly omitted from the gross estate
                                      of Dorothy Dillon Eweson (Ms. Eweson), resulting in a pos-
                                      sible $75 million underpayment in Federal estate tax. He
                                      alleged in the other claim that Ms. Eweson impermissibly
                                      modified two trusts as part of a scheme to avoid the genera-
                                      tion-skipping transfer tax. The trusts at issue had a com-
                                      bined value of over $200 million at the time of Ms. Eweson’s
                                      death in 2005.
                                         Petitioner obtained the information reported in the claims
                                      by representing the guardian of a purported trust bene-
                                      ficiary. He verified the information by examining the public
                                      records and the records of his client. Petitioner submitted
                                      additional supporting information several months after
                                      submitting the claims.
                                         Respondent’s Whistleblower Office (Whistleblower Office)
                                      notified petitioner that it had received the whistleblower
                                      claims. The Whistleblower Office explained that petitioner’s
                                      information would be used to determine whether to further
                                      investigate the alleged violations. The Whistleblower Office
                                      also told petitioner that he would be informed at the conclu-
                                      sion of the review and investigation whether his information
                                      met the criteria for paying an award.
                                        1 All section references are to the Internal Revenue Code (Code), as amended, and all Rule

                                      references are to the Tax Court Rules of Practice and Procedure.




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                                      (597)                         COOPER v. COMMISSIONER                                           599


                                         The Whistleblower Office reviewed the information peti-
                                      tioner provided in the whistleblower claims. The Whistle-
                                      blower Office forwarded the information to the IRS office with
                                      subject matter jurisdiction over the issues raised. After that
                                      office reviewed the information provided by petitioner,
                                      respondent concluded that no administrative or judicial
                                      action would be taken against the taxpayer.
                                         The Whistleblower Office sent petitioner a letter stating
                                      that respondent had considered petitioner’s whistleblower
                                      claims. It explained that a section 7623(b) award determina-
                                      tion could not be made for either claim because petitioner did
                                      not identify any Federal tax issues upon which the IRS would
                                      take action. The letter further explained that an award was
                                      not warranted for either claim because petitioner’s informa-
                                      tion did not result in the detection of any underpayments of
                                      tax.
                                         Petitioner filed two separate petitions in this Court in
                                      response to respondent’s denials of the whistleblower
                                      claims. 2 Respondent filed answers to the petitions.
                                      Respondent attached an undated memorandum from Norman
                                      Wilson, an IRS estate tax attorney (ETA), as an exhibit to the
                                      answer in docket No. 24179–09W. 3 The memorandum
                                      summarizes the facts, legal analysis and legal conclusion for
                                      respondent’s denials of petitioner’s claims.
                                         Respondent filed the summary judgment motions that are
                                      presently before the Court. Petitioner objects to the motions.

                                                                                Discussion
                                        We are asked to decide whether summary judgment is
                                      appropriate in this whistleblower matter. Summary judg-
                                      ment is intended to expedite litigation and avoid unnecessary
                                      and expensive trials. See, e.g., FPL Group, Inc. & Subs. v.
                                      Commissioner, 116 T.C. 73, 74 (2001). A motion for summary
                                      judgment will be granted if the pleadings, answers to inter-
                                      rogatories, depositions, admissions, and other acceptable
                                      materials, together with the affidavits, if any, show that
                                      there is no genuine issue as to any material fact and that a
                                        2 Respondent filed motions to dismiss for lack of jurisdiction on the grounds that respondent

                                      had not issued award determination notices to petitioner. We determined that the Whistleblower
                                      Office’s letters to petitioner constituted determination notices and denied respondent’s motions
                                      to dismiss. See Cooper v. Commissioner, 135 T.C. 70 (2010).
                                        3 The memorandum was not filed in docket No. 24178–09W.




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                                      600                136 UNITED STATES TAX COURT REPORTS                                         (597)


                                      decision may be rendered as a matter of law. See Rule
                                      121(b); Elec. Arts, Inc. v. Commissioner, 118 T.C. 226, 238
                                      (2002). The moving party has the burden of proving that no
                                      genuine issue of material fact exists and that it is entitled
                                      to judgment as a matter of law. See, e.g., Rauenhorst v.
                                      Commissioner, 119 T.C. 157, 162 (2002). We grant summary
                                      judgment cautiously and sparingly, and only after carefully
                                      ascertaining that the moving party has met all requirements
                                      for summary adjudication. See Associated Press v. United
                                      States, 326 U.S. 1, 6 (1945).
                                         Respondent moves for summary judgment on the grounds
                                      that there remain no genuine issues of material fact for trial.
                                      Petitioner asserts that there are genuine issues of material
                                      fact because respondent failed to properly investigate facts
                                      relevant to petitioner’s whistleblower claims. He argues fur-
                                      ther that respondent failed to apply the correct law in deter-
                                      mining the merits of his claims. Petitioner asks us to direct
                                      respondent to undertake a complete re-evaluation of the facts
                                      in this matter, begin an investigation, open a case file, and
                                      take whatever other steps are necessary to detect an under-
                                      payment of tax.
                                         Generally, an individual who provides information to the
                                      Secretary that leads the Secretary to proceed with an
                                      administrative or judicial action shall receive an award equal
                                      to a percentage of the collected proceeds. Sec. 7623(b)(1).
                                      Thus, a whistleblower award is dependent upon both the
                                      initiation of an administrative or judicial action and collec-
                                      tion of tax proceeds.
                                         Petitioner seeks to litigate whether any Federal estate tax
                                      or gift tax is due from the taxpayer. Our jurisdiction in a
                                      whistleblower action is different from our jurisdiction to
                                      review a deficiency determination. We have jurisdiction in a
                                      deficiency action to redetermine whether there is any income,
                                      estate or gift tax due. See sec. 6214(a). In a whistleblower
                                      action, however, we have jurisdiction only with respect to the
                                      Commissioner’s award determination. See sec. 7623(b). Our
                                      jurisdiction under section 7623(b) does not contemplate that
                                      we redetermine the tax liability of the taxpayer.
                                         Moreover, although Congress authorized the Court to
                                      review the Secretary’s award determination, Congress did
                                      not authorize the Court to direct the Secretary to proceed
                                      with an administrative or judicial action. Congress has




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                                      (597)                         COOPER v. COMMISSIONER                                           601


                                      charged the Secretary with the responsibility of seeking tax
                                      revenue in every possible situation. Secs. 7601 and 7602.
                                      Respondent has explained why he determined that there was
                                      no estate or gift tax due on the facts petitioner presented.
                                      Petitioner may disagree with respondent’s legal conclusions
                                      for why there was no Federal estate or gift tax due. Never-
                                      theless, whistleblower awards are preconditioned on the Sec-
                                      retary’s proceeding with an administrative or judicial action.
                                      Sec. 7623(b)(1). If the Secretary does not proceed, there can
                                      be no whistleblower award.
                                         Finally, respondent properly processed petitioner’s whistle-
                                      blower claims but did not collect any amount of tax, interest
                                      or penalty from the taxpayer based on petitioner’s informa-
                                      tion. Because a whistleblower award is calculated as a
                                      percentage of collected proceeds, if the Commissioner collects
                                      no proceeds there can be no whistleblower award. Sec.
                                      7623(b)(1). We shall grant summary judgment to respondent
                                      in each docket.
                                                                     Appropriate orders and decisions will be
                                                                   entered.

                                                                               f




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