JAT Introduction: This is the second weekly installment of the ChatGPT weekly searches on cases of interest on Federal Tax Procedure. The results are emailed to me each Friday, and I post the results on this blog when I can get to them.
Federal Tax Procedure Case Watch
October 30, 2026 | Decisions issued October 24–30, 2026
I found two new Tax Court opinions worth considering, with
one substantially stronger candidate for your blog. Neither appears in the
currently accessible October entries of your Federal Tax Procedure blog. I also
checked your October 23 report and your subsequent comments to avoid repeating
earlier recommendations.
federaltaxprocedure.blogspot.com
1. Bialer v. Commissioner — Whistleblower awards, IRS
discretion, and the administrative record
Highest priority
T.C. Memo. 2026-110 (Oct. 29, 2026), Judge Gustafson. Docket
No. 6983-19W.
The Tax Court granted summary judgment for the Commissioner,
sustaining the IRS Whistleblower Office's denial of an award under § 7623(b).
The taxpayer had provided information concerning dividend-withholding-tax
avoidance transactions, but the IRS examination proceeded on information
obtained independently from another whistleblower and a Senate investigation.
The court also rejected the taxpayer's argument that an IRS
operating division had made an earlier reviewable award determination and
declined to supplement the administrative record with additional internal IRS
materials.
Current Federal Tax Developments
Why I think this deserves your attention
The most interesting question is not whether this particular
whistleblower should have received an award. It is the relationship among three
distinct propositions: the Whistleblower Office alone makes reviewable award
determinations; IRS operating divisions exercise discretion over examinations;
and the Tax Court ordinarily reviews the award determination on the
administrative record.
Those propositions may be sound individually, but their
interaction raises an important question: Can evidence of internal IRS
examination decisions be relevant to whether the agency proceeded on a
whistleblower's information even though those examination decisions are
themselves unreviewable?
The distinction between reviewing an IRS decision and
considering evidence about that decision seems worth exploring. A court might
lack authority to order an examination yet still need to examine how an
investigation developed to determine statutory causation.
A second possible issue is whether the statute's requirement
that the IRS proceed based on supplied information is properly understood as a
conventional causation inquiry or as something narrower.
Suggested title: Tax Court Denies Whistleblower Award—When
Does Unreviewable IRS Examination Discretion Become Relevant to a Reviewable
Award Decision? (10/30/26)
Official
Tax Court opinion search (search Bialer, T.C. Memo. 2026-110); Detailed
October 30 case discussion.
JAT Action: I was aware of the Bialer opinion and had
determine that there is not enough in the opinion that is not already included
in my Federal Tax Procedure editions. See Student edition, pp. 743-744; pp.;
Practitioner edition pp. 1113-1115 discussing various facets of the “collected proceeds”
base to which the award percentage applies for § 7623(b) awards. The bottom
line key concept is that, if there are no collected proceeds, there is no award;
and anything in the process from filing the Form 211 with the WBO through
actual collections is mostly nonreviewable. Once the Tax Court can conclude
that there are collected proceeds related to the Form 211 information, then the
only thing left is quantify the collected proceeds and determine whether the
IRS properly exercised its discretion in the percentage applied to the
collected proceeds. In any given case (such as Bialer) there will be
nuanced facts, but that is basically it.
By the way, I generally read daily the Tax Notes “Court
Documents” feature here.
That feature is sponsored by Deloitte and has been a major source for my blog
and book writing. There are other Tax Notes features that contribute to my
staying current:
- Proposed Regulations here;
- Treasury Decisions (Final Regulations) here;
- IRS Guidance here;
- IRS Private Letter Rulings and Advice here;
- Legislative Documents here; and
- Other Documents here.
Thanks to Tax Notes and Deloitte for making these resources available to the tax community and general public.
2. Consolidated Sportsmen of Lycoming County v. Commissioner — Statutory interpretation and the measurement of activities
