IRS Tax Whistleblower Articles

Tax Court Amends Whistleblower Rules

Washington, D.C. (Oct. 14, 2008)
By WebCPA staff

The Tax Court has amended its rules of practice and procedure for whistleblower actions, making it easier for informants to keep their identities confidential.

The amendments were issued Oct. 3. One of the rules was amended to enhance privacy by requiring only an individual taxpayer's state of legal residence for venue purposes on a petition for additional disclosure, petition to restrain disclosure or petition to disclose identity. If the taxpayer resides in the District of Columbia or any commonwealth, territory or possession of the United States, or in any foreign country, the taxpayer should provide that information instead.

The court first issued its proposed rules for whistleblower actions on June 2, 2008, according to the Ferraro Law Firm, which represents a number of tax whistleblowers. Those rules did not specifically address the protection of an informant's identity. After public comment, including from Ferraro and the IRS, the court has acknowledged the importance of protecting an informant's identity and laid out the method for anonymous filings and filings under seal in its explanation to Rule 340.

Ferraro has filed whistleblower complaints amounting to an additional $3 billion of underpayments in several recent submissions to the IRS Whistleblower Office, bringing the firm's running total to more than $13 billion.