Kasper v. Commissioner

KENNETH WILLIAM KASPER, PETITIONER v. COMMISSIONER OF
INTERNAL REVENUE, RESPONDENT
Docket No. 13399–10W. Filed July 12, 2011.

On Jan. 29, 2009, P filed with R a claim for a whistleblower
award under sec. 7623(b)(4), I.R.C., implicating a public cor-
poration and its CEO. R bifurcated P’s whistleblower claim
into a claim for the corporation and another for its CEO. On
June 19, 2009, R purportedly issued a letter for each claim,
denying both on the basis that P did not meet the appropriate
criteria for an award under sec. 7623(b), I.R.C. On May 3,
2010, P contacted R about the status of his whistleblower
claim. His letter referenced only the claim implicating the
CEO. On May 24, 2010, R responded by sending P a copy of
the denial letter pertaining to the claim as to the CEO. On
June 14, 2010, P filed a petition with this Court seeking
review of R’s denial of the whistleblower claim as to the CEO.
R filed a motion to dismiss this case for lack of jurisdiction
on two grounds: First, that no determination under sec.
7623(b), I.R.C., was made; and, second, if we find that a deter-
mination was made, that P failed to petition this Court within
30 days as required by sec. 7623(b)(4), I.R.C. P argues that he
did not receive a determination pursuant to sec. 7623(b)(4),
I.R.C., with respect to the corporate claim. Further, P argues
that he did not receive a determination with respect to the
claim implicating the CEO until May 24, 2010. Because he

37

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filed his petition on June 14, 2010, he argues that he has met
the 30-day requirement of sec. 7623(b)(4), I.R.C., giving this
Court jurisdiction as to the claim implicating the CEO. Held:
In accordance with our decision in Cooper v. Commissioner,
135 T.C. 70 (2010), each Whistleblower Office letter that
denies a whistleblower claim is a determination within the
meaning of sec. 7623(b)(4), I.R.C. Held, further, R must prove
by direct evidence the date and fact of mailing of the deter-
mination to the whistleblower. Magazine v. Commissioner, 89
T.C. 321, 326 (1987). Held, further, the 30-day period of sec.
7623(b)(4), I.R.C., within which a whistleblower must file a
petition in response to a Whistleblower Office determination,
begins on the date of mailing of the determination by the
Whistleblower Office. Held, further, P filed his petition with
this Court within the 30-day period specified by sec.
7623(b)(4), I.R.C., and we shall deny R’s motion to dismiss for
lack of jurisdiction.

Kenneth William Kasper, pro se.
John T. Kirsch, for respondent.
OPINION

HAINES, Judge: This case is before the Court on respond-
ent’s motion to dismiss for lack of jurisdiction. The two issues
before us are: (1) Whether a letter denying petitioner’s
whistleblower claim constitutes a ‘‘determination’’ within the
meaning of section 7623(b)(4); 1 and (2) if it does, whether
petitioner filed a petition with this Court ‘‘within 30 days of
such determination’’ to establish subject matter jurisdiction.

Background
Petitioner resided in Arizona at the time he filed his peti-
tion.
On January 29, 2009, petitioner filed a Form 211, Applica-
tion for Award for Original Information (whistleblower
claim), with respondent’s Whistleblower Office (Whistle-
blower Office). Petitioner’s whistleblower claim provided
information alleging that a public corporation and its CEO
failed to pay required overtime and failed to withhold
employment taxes with respect to that overtime.
The Whistleblower Office bifurcated petitioner’s whistle-
blower claim into a claim for the corporation (corporate
claim) and one for the CEO (CEO claim) and assigned each a
1 All section references are to the Internal Revenue Code of 1986, as amended.

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 (37) KASPER v. COMMISSIONER 39

separate claim number. On April 10, 2009, the Whistleblower
Office sent petitioner a separate letter for each claim which
informed him that the claims were being evaluated to deter-
mine whether an investigation was warranted and a reward
was appropriate.
On June 19, 2009, the Whistleblower Office denied both
claims. A denial letter was prepared for each claim. Each
denial letter explained that the Whistleblower Office had
reviewed and evaluated petitioner’s claim and determined
that the information he provided did not meet the appro-
priate criteria for an award. The denial letters also stated
that Federal disclosure and other prevailing laws prevented
the Whistleblower Office from providing a specific expla-
nation for the denials. Consequently, the denial letters
recited a boilerplate list of common reasons for not allowing
an award, including: (1) The application provided insufficient
information; (2) the information provided did not result in
the recovery of taxes, penalties, or fines; or (3) the Internal
Revenue Service (IRS) already had the information provided
or such information was available in public records.
The only direct evidence of the date when petitioner was
notified of the denial of his whistleblower claim was a letter
sent by the Whistleblower Office in response to an inquiry by
petitioner. On May 3, 2010, petitioner notified the Whistle-
blower Office that the public corporation implicated had
made a settlement payment to the IRS. In the May 3 letter,
petitioner asked when he could expect notification that the
information he provided met the appropriate criteria for an
award. Petitioner’s letter referenced the claim number
assigned to the CEO claim, not to the corporate claim. On
May 24, 2010, the Whistleblower Office responded by sending
petitioner a copy of the denial letter dated June 19, 2009, for
the CEO claim. A copy of the denial letter for the corporate
claim was not provided. On June 14, 2010, petitioner filed
his petition for a whistleblower action with this Court pursu-
ant to section 7623(b)(4) seeking review of respondent’s
denial of the whistleblower claim as to the CEO.
During the time relevant to this case, the standard prac-
tice within the Whistleblower Office was to prepare a denial
letter and scan it into e-Trak, the Whistleblower Office’s com-

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puter database. 2 Thereafter, history notes were written or
typed, dated, and then entered into e-Trak as an investiga-
tion history report. A copy of the denial letter was placed in
a paper file.
Standard mailing procedures for denial letters required
that the original denial letter be placed by a clerk in an
envelope addressed to the whistleblower claimant at his or
her last known address and deposited in the Whistleblower
Office’s outgoing mail. At the end of each day, a clerk took
the outgoing mail to the facilities mailroom, where mail was
picked up daily for delivery by the U.S. Postal Service. None
of the letters were sent by certified or registered mail, and
a mailing log was not kept.
The e-Trak system and the investigation history reports
indicate that the Whistleblower Office’s standard procedures
were followed in petitioner’s case. 3 Moreover, the denial let-
ters were addressed to petitioner at his last known address
and were not returned to the Whistleblower Office by the
U.S. Postal Service as undeliverable.

Discussion
We are asked to decide: (1) Whether a letter denying peti-
tioner’s whistleblower claim constitutes a ‘‘determination’’
within the meaning of section 7623(b)(4); and (2) if it does,
whether petitioner filed a petition with this Court ‘‘within 30
days of such determination’’ pursuant to section 7623(b)(4) to
give this Court subject-matter jurisdiction.
The Tax Court is a court of limited jurisdiction and may
exercise its jurisdiction only to the extent authorized by Con-
gress. 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 statu-
tory 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
2 Bradley DeBerg, supervisor of the Whistleblower Office in Ogden, Utah, provided the infor-

mation relating to standard practice by means of a declaration in support of respondent’s motion
to dismiss for lack of jurisdiction.
3 The date on petitioner’s denial letters is June 19, 2009, yet the investigation history reports

provide a date of June 18, 2009. DeBerg explained this discrepancy by saying that it is likely
that a clerk in the Whistleblower Office mistakenly used the wrong date stamp on the investiga-
tion history reports.

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 (37) KASPER v. COMMISSIONER 41

T.C. 626, 632 (1984); Kluger v. Commissioner, 83 T.C. 309,
314 (1984).
Congress enacted section 7623(b)(4) as part of the Tax
Relief and Health Care Act of 2006, Pub. L. 109–432, div. A,
sec. 406, 120 Stat. 2958 (effective Dec. 20, 2006). Section
7623(b)(4) provides:
(4) APPEAL OF AWARD DETERMINATION.—Any determination regarding an
award under paragraph (1), (2), or (3) may, within 30 days of such deter-
mination, be appealed to the Tax Court (and the Tax Court shall have
jurisdiction with respect to such matter).

Section 7623(b)(4) clearly provides that: (1) The whistle-
blower claimant has a right to appeal any determination
made by the Whistleblower Office; (2) he or she must appeal
within a 30-day period; and (3) the Tax Court has jurisdic-
tion to hear the appeal. The jurisdiction of the Court is
dependent upon a finding that a determination has been
made and a finding that the appeal from the determination
is timely. However, the statute does not clearly define the
term ‘‘determination’’ or the date on which the 30-day period
begins.
A. Determination
Respondent argues that there has been no determination
with respect to either of petitioner’s claims because the
information provided was not used to detect underpayments
of tax or to collect proceeds. Respondent argues that there
can be a determination on which an appeal to the Tax Court
can be based only if the Whistleblower Office undertakes an
administrative or judicial action and thereafter determines to
make an award.
We recently decided this issue in Cooper v. Commissioner,
135 T.C. 70 (2010). Faced with identical arguments from the
Commissioner in Cooper, we held that a letter rejecting a
whistleblower claim constitutes a determination within the
meaning of section 7623(b)(4) because it is a final adminis-
trative decision. We see no reason not to follow our holding
in Cooper. Here the denial letter from the Whistleblower
Office states that petitioner is not entitled to an award. It is
a final administrative decision. Accordingly, we find that
each of the June 19, 2009, denial letters constitutes a deter-
mination within the meaning of section 7623(b)(4).

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B. Timeliness
In 2006 the Tax Court was given jurisdiction to hear
appeals of determinations under the whistleblower statute
(section 7623(b)(4)) and the lien and levy statute (section
6330(d)). Both statutes use similar language to describe the
period within which a person may appeal an adverse deter-
mination to the Tax Court. Section 7623(b)(4) provides that
an appeal must be filed ‘‘within 30 days of such determina-
tion’’, while section 6330(d) provides that an appeal must be
filed ‘‘within 30 days of a determination under this section’’.
Neither statute expressly provides that the determination
must be communicated to the person subject to the deter-
mination. Yet Congress clearly intended to provide a whistle-
blower with due process; i.e., notice and an opportunity to be
heard. Requiring the Whistleblower Office to provide the
whistleblower with notice of the determination is the logical
first step to establish the starting date for the period of
appeal. 4 Otherwise, the IRS could delay notifying the claim-
ant until 30 days after the determination is issued and
thereby deprive a claimant of any appeal rights.
When considering notice requirements in lien and levy
cases, we have held in Weber v. Commissioner, 122 T.C. 258,
261–262 (2004):
Although section 6330(d) does not specify the means by which the
Commissioner is required to give notice of a determination made under
sections 6320 and 6330, we conclude that the method that Congress
specifically authorized for sending notices of deficiency in section 6212(a)
and (b) certainly should suffice. Accordingly, we hold that a notice of deter-
mination issued pursuant to sections 6320 and/or 6330 is sufficient if such
notice is sent by certified or registered mail to a taxpayer at the taxpayer’s
last known address. * * *

The Secretary promulgated detailed regulations for lien and
levy cases to establish that notices of determination must be
mailed by certified or registered mail, must set forth the
Office of Appeals’ findings and decisions, and must advise the
taxpayer of the taxpayer’s right to seek judicial review. 5
4 Every other statute invoking the jurisdiction of the Court requires the Commissioner to mail

a written notice or determination, usually by certified or registered mail, or to personally deliver
the notice or determination, to establish the starting date of the period of appeal. See, e.g., secs.
6015(e)(1)(A)(i)(I), 6110(f), 6213(a), 6226(a), 6247(a), 6404(h).
5 Sec. 301.6330–1(e)(3), Q&A E8, E10, Proced. & Admin. Regs. The regulations provide incon-

sistent starting dates (E8, within 30 days of the date of the notice of determination; E10, within

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 (37) KASPER v. COMMISSIONER 43

In contrast, for whistleblower cases, the IRS issued internal
guidance governing the Whistleblower Office’s operations.
Internal Revenue Manual (IRM) pt. 25.2.2, Whistleblower
Awards. IRM pt. 25.2.2.13 (Dec. 30, 2008), in effect for the
date the denial letters were issued in this case, stated:
Once the Whistleblower Office has made a final determination regarding
a claim, the Whistleblower Office will communicate the determination, in
writing, to the claimant. Final Whistleblower Office determinations
regarding awards under section 7623(b) may, within 30 days of such deter-
mination, be appealed to the United States Tax Court. In accordance with
section 7623(b)(4), decisions under section 7623(a) may not be appealed to
the Tax Court.

The guidance was silent as to when and how the communica-
tion had to be sent. 6
We hold that the Commissioner must demonstrate either
mailing or personal delivery of a denial letter to the whistle-
blower’s last known address.
1. The Arguments
The denial letters are dated June 19, 2009. Petitioner filed
his petition with the Court on June 14, 2010, 360 days later.
Petitioner’s petition references only the denial letter for the
CEO claim. Petitioner argues that he did not receive a denial
letter in reference to the corporate claim. Petitioner further
argues that he did not receive a denial letter in reference to
the CEO claim until May 24, 2010, when the Whistleblower
Office sent him a copy of the June 19, 2009, letter in
response to his request for information on the status of his
whistleblower claim. Accordingly, petitioner argues that his
petition with respect to the CEO claim is timely and that he
has yet to receive a determination with respect to the cor-
porate claim.
the 30-day period commencing the day after the date of notice of determination). The inconsist-
ency has not been the subject of litigation to date.
6 On June 18, 2010, the IRM was revised. Revised IRM pt. 25.2.2.10 states:

Once the Whistleblower Office has made a final determination regarding a claim under
7623(b)(1), (2), or (3), the Whistleblower Office will communicate the determination, in writing
via certified mail, to the claimant. Final Whistleblower Office determinations regarding awards
under section 7623(b)(1), (2) and (3) may, within 30 calendar days of such determination, be ap-
pealed to the United States Tax Court, 400 Second Street, NW, and Washington DC 20217. The
IRS does not have the authority to extend the period for filing an appeal. In accordance with
section 7623(b)(4), decisions under section 7623(a) may not be appealed to the Tax Court.
The certified mail requirement, however, was not in effect for the date the denial letters were
issued in this case and is therefore not applicable.

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Respondent argues that the denial letters were mailed to
petitioner on June 19, 2009, the date they were prepared,
and, therefore, petitioner’s 30-day window to appeal the
denial letters began on that date. Because no appeal was
filed as to the corporate claim and the appeal on the CEO
claim was filed outside the 30-day period, respondent argues
that we are without jurisdiction to review the determina-
tions.
2. Findings and Holding
The Government is generally entitled to a rebuttable
presumption of delivery upon presentation of evidence of
proper mailing. See Hagner v. United States, 285 U.S. 427,
430 (1932); Godfrey v. United States, 997 F.2d 335, 338 (7th
Cir. 1993); Doolin v. United States, 918 F.2d 15 (2d Cir.
1990). Although the Whistleblower Office did not have a cer-
tified mailing requirement at the time the denial letters were
issued, respondent argues there is a strong inference of
delivery when it is shown that the Whistleblower Office com-
plied with its internal procedures for mailing of the denial
letters in the regular course of its operations. See Mahon v.
Credit Bureau of Placer Cy. Inc., 171 F.3d 1197 (9th Cir.
1999); Godfrey v. United States, supra; Gonzales Packing Co.
v. East Coast Brokers & Packers, Inc., 961 F.2d 1543, 1545
(11th Cir. 1992); McClaskey v. Commissioner, T.C. Memo.
2008–147. A strong inference must arise from more than
unsupported conclusory statements of an individual based on
his assumption of how mail was handled in the normal
course of business in his office. See Gonzales Packing Co. v.
E. Coast Brokers & Packers, Inc., supra at 1545; Leasing
Associates, Inc. v. Slaughter & Son, Inc., 450 F.2d 174, 178
(8th Cir. 1971).
Respondent argues that the standard operating procedures
within the Whistleblower Office were followed to prove that
the denial letters were mailed. The Whistleblower Office’s e-
Trak system was described. The e-Trak system is a computer
record which indicates that a denial letter was sent but does
not confirm where it was sent, to whom it was sent, or
whether it was a part of the Whistleblower Office’s outgoing
mail.

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Nor was there a mailing log. In McClaskey v. Commis-
sioner, supra, we held that mailing logs showing a taxpayer’s
name and last known address, confirmation that the log was
reviewed for accuracy, and the testimony of an agent familiar
with the IRS’ mailing procedures were sufficient to prove that
a notice of beginning of administrative proceeding had been
mailed. Respondent has not presented similar mailing logs or
any other direct evidence that the denial letters were prop-
erly mailed to petitioner on June 19, 2009.
Although evidence of standard practice will be afforded
appropriate weight as the circumstances of each case require,
we cannot find that compliance with standard practices
within the Whistleblower Office, standing alone, permits a
finding that the denial letters in question were mailed to
petitioner on June 19, 2009. The date a determination is
mailed is of critical importance to establish our jurisdiction
to review a taxpayer’s case. We will hold we do not have
jurisdiction when a taxpayer does not meet the 30-day
requirement. And as we have emphasized in cases involving
our jurisdiction: ‘‘In this setting, we must require * * * [the
Commissioner] to prove by direct evidence the date and fact
of mailing the notice to a taxpayer.’’ Magazine v. Commis-
sioner, 89 T.C. 321, 326 (1987).
We hold that the 30-day period of section 7623(b)(4) within
which a whistleblower must file a petition in response to a
Whistleblower Office determination begins on the date of
mailing or personal delivery of the determination to the
whistleblower at his last known address. We further hold
that the Commissioner must prove by direct evidence the
date and fact of mailing or personal delivery of the notice to
the whistleblower. Respondent failed to prove that the denial
letters were properly mailed to petitioner on June 19, 2009.
The denial letter for the CEO claim, however, was mailed on
May 24, 2010. Petitioner filed his petition with the Court on
June 14, 2010. Accordingly, petitioner timely filed his peti-
tion with respect to the CEO claim. 7
In reaching these holdings, the Court has considered all
arguments made and, to the extent not mentioned, concludes
that they are moot, irrelevant, or without merit.
7 With respect to the denial letter on the corporate claim, there is no direct evidence of mailing

and, therefore, the time has yet to begin in which petitioner may file a petition as to that claim
pursuant to sec. 7623(b)(4).

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 46 137 UNITED STATES TAX COURT REPORTS (37)

For the foregoing reasons, we will deny respondent’s
motion to dismiss as to the CEO claim.
An appropriate order will be issued.
f

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