A New Jersey CPA provided whistleblower information to the IRS that the IRS failed to pursue, and he unsuccessfully sued the IRS.

Raymond Cohen, CPA, brought action in Tax Court challenging the IRS’s decision not to pursue the information he provided. In a case of first impression, the Tax Court dismissed Cohen’s petition and denied as moot his motion for summary judgment.

Cohen acted on information from his wife, who served as executrix of an estate. The estate held uncashed stock dividend checks issued by the taxpayer, a public corporation. The taxpayer refused to release dividends without Cohen’s wife presenting an original check issued within the last 10 years.

Cohen suspected that the taxpayer customarily retained possession of unclaimed proceeds resulting from uncashed dividend checks and unredeemed bonds, and provided this information to the IRS.  The IRS Whistleblower Office informed Cohen he was not eligible for an award because no proceeds were collected, and the claim was based on publicly available information.

The Tax Court concluded that relief is unavailable to Cohen because the IRS never instituted an action or collected any proceeds. Code Section 7623(b)(4) authorizes review of any award determination , but here there was no such award.  “We can appreciate petitioner’s frustration that information that he believes is actionable was not pursued,” the court stated. “Congress, however, has charged the Commissioner with resolving these claims and has not provided any remedies until after an administrative or judicial action and the collection of proceeds.”

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