Bloomberg Law
May 24, 2023, 9:50 PM

Bad Faith A Route to Discovery in Whistleblower-IRS Dispute

Jeffery Leon
Jeffery Leon

Whistleblowers seeking to discover complete investigation records while disputing a denied award can make a “significant showing” that the IRS is acting in bad faith in withholding them, the US Tax Court held. Or, the court said, a whistleblower can demonstrate the record is incomplete under the same standard.

In 2007, former stock trader Jeremy Berenblatt was interviewed by the IRS as part of an investigation into promoters of Short Option Strategies, a digital foreign exchange transaction. Berenblatt claims that he disclosed to investigators that it could be used to evade taxes. Berenblatt was one of over 100 people interviewed, ...

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