T.C. Memo. 2011-90
UNITED STATES TAX COURT
MURRAY S. FRIEDLAND, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 13926-10W. Filed April 25, 2011.
Murray S. Friedland, pro se.
John T. Kirsch, for respondent.
MEMORANDUM OPINION
KROUPA, Judge: This case is before the Court on
respondent’s motion to dismiss for lack of jurisdiction, as
supplemented. We are asked to decide two issues. We must first
determine whether a letter respondent sent to petitioner denying
petitioner’s whistleblower claims constitutes a “determination”
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within the meaning of section 7623(b)(4).1 We find that the
letter was a determination and follow Cooper v. Commissioner, 135
T.C. 70 (2010). We must next determine whether petitioner timely
filed a petition with this Court. We find that he did not. We
shall therefore grant respondent’s dismissal motion, as
supplemented.
Background
The following information is stated for purposes of
resolving the pending motion. Petitioner resided in New York
City, New York at the time he filed the petition.
Petitioner, a CPA, submitted a Form 211, Application for
Award for Original Information (whistleblower claim), to
respondent’s Whistleblower Office (Whistleblower Office) in
September 2009 concerning alleged violations of the Internal
Revenue Code. He alleged that Lawjoy Realty Corporation (Lawjoy)
and 601 West 149th Street, Inc. (West 149th), both C
corporations, failed to pay millions in Federal corporate income
taxes by impermissibly treating real property sales as stock
sales in a corporate liquidation. He asserts that the structure
of the sales was a sham and solely motivated to evade income
taxes. Petitioner appears to have been a shareholder of both
Lawjoy and West 149th.
1
All section references are to the Internal Revenue Code,
and all Rule references are to the Tax Court Rules of Practice
and Procedure, unless otherwise indicated.
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The Whistleblower Office denied petitioner’s whistleblower
claim in a letter issued November 13, 2009 (the first letter).
The first letter explained that the Whistleblower Office had
reviewed and evaluated petitioner’s whistleblower claim before
making its decision. It stated that Federal disclosure and other
prevailing laws prevented the Whistleblower Office from
explaining why it was denying his claim. Moreover, the first
letter gave general explanations for disallowing rewards. It
explained that claims are denied if the claimant provided
insufficient information. Similarly, the first letter explained
that claims are denied if the Internal Revenue Service already
had the information or the information provided did not cause an
investigation or result in the recovery of taxes, penalties or
fines.
Petitioner was unsure why his claim was denied so he called
the Whistleblower Office to discuss the denial. He also
gratuitously sent additional information to the Whistleblower
Office concerning the transaction. The Whistleblower Office
subsequently mailed three additional letters to petitioner. One
letter referenced the phone conversation with petitioner. This
letter told petitioner that to challenge the Whistleblower
Office’s decision he could “write to the US Court of Claim (sic)
in Washington DC (sic).” The two other letters from the
Whistleblower Office were duplicates confirming that petitioner’s
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additional information had been received and considered but
stating that the “determination remains the same despite the
information contained in * * * [petitioner’s] latest letter.”
Petitioner thereafter filed a complaint in the United States
Court of Federal Claims (Claims Court) as directed. He
challenged the Whistleblower Office’s decision. The Claims Court
dismissed petitioner’s complaint for lack of jurisdiction on May
26, 2010.
Petitioner then filed a petition in this Court challenging
respondent’s denial of the whistleblower claim. He did not file
the petition until June 18, 2010, which was 217 days after he
received the first letter. As mentioned previously, respondent
filed a motion to dismiss for lack of jurisdiction. He argues
principally that no determination notice had been issued to
petitioner to confer on us jurisdiction. Respondent argues,
alternatively, that if a determination notice was issued,
petitioner failed to file a petition with the Court within the
required 30-day period.
Discussion
We are asked to decide whether respondent’s letter denying
petitioner’s whistleblower claim constitutes a “determination”
within the meaning of section 7623(b)(4). We are also asked to
decide whether petitioner timely filed his petition with this
Court.
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We begin with the Tax Court’s jurisdiction. The Tax Court
is a court of limited jurisdiction and may exercise its
jurisdiction only to the extent authorized by Congress. 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 statutory 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 T.C. 626, 632 (1984); Kluger v. Commissioner,
83 T.C. 309, 314 (1984). We turn now to an overview of our
jurisdiction regarding whistleblower claims.
I. Determination Notice
The Court’s jurisdiction under section 7623(b)(4) depends
upon a determination regarding an award and a timely petition.
Rule 340(b); Cooper v. Commissioner, supra. Any determination
regarding an award from the Whistleblower Office may be appealed
to the Tax Court. Sec. 7623(b)(4). Respondent argues that there
was no determination because petitioner’s information was not
used to detect underpayments of tax or to collect proceeds. See
Internal Revenue Manual pt. 25.2.2 (Dec. 30, 2008). Respondent
argues that there can be a determination for jurisdictional
purposes only if the Whistleblower Office undertakes an
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administrative or judicial action and thereafter “determines” to
make an award. See id.
We recently decided the issue of whether a letter from the
Whistleblower Office to a taxpayer was a “determination” under
section 7623(b) where the Whistleblower Office rejected a
taxpayer’s claim for an award. See Cooper v. Commissioner, 135
T.C. 70 (2010). We held that the letter constituted a
determination because it was a final administrative decision
regarding the taxpayer’s whistleblower claims. We stand by our
holding in Cooper.
Here, petitioner received four letters from the
Whistleblower Office. The first letter denied petitioner’s
whistleblower claim. The subsequent three letters merely
reaffirmed the initial determination in the first letter.
Moreover, the Whistleblower Office stated in a letter to
petitioner that he would have to appeal the determination through
the court system, not the Whistleblower Office. Accordingly, we
find that respondent’s first letter to petitioner constituted a
determination within the meaning of section 7623(b)(4). We
therefore have jurisdiction to review respondent’s denial of
petitioner’s whistleblower claim.
II. Timeliness of Petitioner’s Petition
We next consider whether petitioner timely filed the
petition. To invoke the Court’s jurisdiction, an individual must
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appeal the amount or denial of an award determination to this
Court within 30 days of such a determination by the Whistleblower
Office. Sec. 7623(b)(4). Failure to file within the 30 days
deprives the Court of subject matter jurisdiction. The
Whistleblower Office issued petitioner its determination on
November 13, 2009. Petitioner thereafter had 30 days to file an
appeal with this Court, which he failed to do. Petitioner
eventually filed a petition on June 18, 2010, that is, 217 days
after the first letter was issued.
We recognize that petitioner may have relied on the
erroneous advice of the Whistleblower Office in filing his
initial appeal with the Claims Court. We, however, are limited
in the relief we can provide. This Court’s jurisdiction is
strictly statutory, and estoppel cannot create jurisdiction where
none exists. See Lumber Prods., Inc. v. Commissioner, T.C. Memo.
1992-728. We sympathize with petitioner. We cannot expand our
jurisdiction, however, even where the Commissioner provided bad
advice. See Schoenfeld v. Commissioner, T.C. Memo. 1993-303.
Accordingly, we find that petitioner failed to timely file a
petition with this Court.
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For the foregoing reasons, we shall grant respondent’s
motion to dismiss.
An appropriate order of dismisal
for lack of jurisdiction will be
entered.