United States Tax Court

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159 T.C. No. 1

WHISTLEBLOWER 972-17W,

Petitioner

COMMISSIONER OF INTERNAL REVENUE,

Respondent

—————

Docket No. 972-17W.

Filed July 13, 2022.

—————

Whistleblower WB provided information to the IRS

regarding three target taxpayers.

The Government

initiated actions against the target taxpayers and collected

proceeds, but the Whistleblower Office denied WB’s claim

for an award under I.R.C. § 7623(b). WB petitioned our

Court for review.

The Court ordered R to file with the Court redacted

and unredacted copies of the administrative record, which

included returns and return information of the target

taxpayers. R filed a redacted copy of the administrative

record and requested that the Court excuse him from filing

an unredacted copy to protect I.R.C. § 6103 information.

The Court ordered R to submit the unredacted copy for

review in camera. R moved the Court to modify its order,

arguing that I.R.C. § 6103 does not permit R to disclose to

the Court the information R redacted.

Held: On these facts, consistent with Li v.

Commissioner, 22 F.4th 1014 (D.C. Cir. 2022), the Tax

Court has jurisdiction to hear this case.

Held, further, I.R.C. § 6103(h)(4)(A) authorizes R to

submit the unredacted administrative record to the Court.

Served 07/13/22

—————

George Munoz, for petitioner.

Bartholomew Cirenza and Ryan Z. Sarazin, for respondent.

OPINION

TORO, Judge: Section 6103(a) 1 provides that returns and return

information generally must be kept confidential and that officers and

employees of the United States are precluded from disclosing returns

and return information unless specifically authorized by the Code. One

such authorization appears in section 6103(h)(4).

Section 6103(h)(4) permits, in certain circumstances, the

disclosure of returns or return information in the context of a federal or

state judicial or administrative proceeding that pertains to tax

administration. Among other things, disclosure is authorized in a

judicial proceeding that “arose out of, or in connection with, determining

the taxpayer’s civil or criminal liability, or the collection of such civil

liability, in respect of any tax imposed [by the Code].” I.R.C.

§ 6103(h)(4)(A).

In this whistleblower case, the Court ordered the Commissioner

of Internal Revenue to submit for in camera review an unredacted copy

of the administrative record on which the case is based. The

Commissioner moved that the order be modified, arguing that section

6103(a) precludes him from complying. The Commissioner reasons that

the administrative record includes returns and return information that

the Code does not authorize him to disclose. Regarding section

6103(h)(4), the Commissioner agrees that this case is a judicial

proceeding pertaining to tax administration, but contends that the other

requirements of section 6103(h)(4) have not been satisfied with respect

to the materials he wishes to protect from disclosure.

1 Unless otherwise indicated, all statutory references are to the Internal

Revenue Code, Title 26 U.S.C. (I.R.C. or Code), in effect at all relevant times, all

regulation references are to the Code of Federal Regulations, Title 26 (Treas. Reg.), in

effect at all relevant times, and all Rule references are to the Tax Court Rules of

Practice and Procedure.

After assuring ourselves that we have jurisdiction in light of the

recent decision of the U.S. Court of Appeals for the District of Columbia

Circuit in Li v. Commissioner, 22 F.4th 1014 (D.C. Cir. 2022), we

consider the Commissioner’s contentions. We conclude that section

6103(h)(4)(A) authorizes disclosing in this proceeding the returns and

return information that the Commissioner seeks to withhold. This is so

because this case “arose . . . in connection with” determining the civil

and criminal tax liabilities of the taxpayers whose returns and return

information are at issue. Accordingly, section 6103 does not preclude

the Commissioner from submitting to the Court an unredacted copy of

the administrative record. We will therefore deny the Commissioner’s

Motion.

Background

The following facts are derived from the pleadings, the parties’

motion papers, the declarations and exhibits attached thereto, and the

redacted administrative record filed with the Court. These facts are

stated solely for the purpose of ruling on the motion before us and not

as findings of fact in this case. See Whistleblower 769-16W v.

Commissioner, 152 T.C. 172, 173 (2019).

Petitioner is a whistleblower who provided information to the

Internal Revenue Service (IRS) regarding three individuals (taxpayers

1, 2, and 3). The Government pursued actions against all three

individuals (targets) (including criminal actions with respect to two of

the targets) and ultimately collected proceeds from each of them. But

the IRS Whistleblower Office (WBO) denied the whistleblower’s claim

for an award under section 7623(b). The WBO acknowledged to the

whistleblower that “[t]he IRS reviewed the information you provided as

part of an ongoing investigation/examination of the taxpayer(s).” But,

the WBO explained, “that review did not result in the assessment of

additional tax, penalties, interest or other amounts with respect to the

issues you raised.” The WBO further noted that “[t]he IRS did assess

additional tax, penalties, interest or additional amounts but the

information you provided was not relevant to those issues.” The

whistleblower petitioned our Court for review.

In general, our Court reviews whistleblower cases based on the

administrative record. See Kasper v. Commissioner, 150 T.C. 8, 20

(2018). Accordingly, the Court ordered the Commissioner to file with

the Court redacted and unredacted copies of the administrative record

compiled by the WBO. The Commissioner filed a redacted copy of the

administrative record and requested that the Court excuse him from

filing an unredacted copy “to protect . . . section 6103 information and

. . . other identifying information.” The Court ordered the Commissioner

to submit to the Court, for review in camera, any documents that the

Commissioner wished to redact to preserve a privilege or protect

taxpayer information.

In response, the Commissioner moved the Court to modify its

order, requesting that the Court strike the portion of the order that

directed the Commissioner to submit the entire unredacted

administrative record for review in camera. The Commissioner argued

that there is no exception in section 6103 that would permit him to

disclose the redacted information to the Court. The whistleblower filed

a response opposing the Commissioner’s Motion. The Court then

ordered the parties to file separate memoranda addressing the

applicability of section 6103 to this case. We now consider the merits of

the Commissioner’s request.

Discussion

Section 7623 Background

Section 7623 provides for awards to individuals (commonly

referred to as whistleblowers) who submit information to the

Government about third parties who have underpaid their taxes or

otherwise violated the internal revenue laws.

Section 7623(a)

authorizes discretionary payments in certain circumstances, while

section 7623(b) provides for nondiscretionary (i.e., mandatory) awards.

Under section 7623(b)(1), a whistleblower generally is entitled to

a mandatory award if the Secretary of the Treasury proceeds with an

administrative or judicial action based on information provided by the

whistleblower and collects proceeds as a result of the action. 2 The

2 Section 7623(b)(1) provides:

If the Secretary proceeds with any administrative or judicial action

described in subsection (a) based on information brought to the

Secretary’s attention by an individual, such individual shall, subject to

paragraph (2), receive as an award at least 15 percent but not more

than 30 percent of the proceeds collected as a result of the action

(including any related actions) or from any settlement in response to

such action (determined without regard to whether such proceeds are

available to the Secretary). The determination of the amount of such

amount of the award generally is between 15 and 30% of the collected

proceeds, depending on the extent to which the whistleblower

substantially contributed to the action. I.R.C. § 7623(b)(1).

In some circumstances, a mandatory whistleblower award under

section 7623(b)(1) may be reduced or denied. Specifically, section

7623(b)(2) provides for the potential reduction of an award if the

Secretary’s action is based principally on publicly available information

rather than the whistleblower’s information, while section 7623(b)(3)

provides for the reduction or denial of an award based on the

whistleblower’s culpability for the tax underpayments underlying the

award. Additionally, section 7623(b)(5) sets out certain monetary

thresholds that must be satisfied for section 7623(b) to apply in the first

instance.

II.

Jurisdiction

General Principles

Like all federal courts, we are a court of limited jurisdiction.

Whistleblower 21276-13W v. Commissioner, 155 T.C. 21, 26 (2020). We

exercise jurisdiction only over matters that Congress expressly

authorizes us to consider. Id.; see also I.R.C. § 7442. Of course, we

always have jurisdiction to determine whether we have jurisdiction.

Whistleblower 21276-13W, 155 T.C. at 26. And we must assure

ourselves of our jurisdiction even when not asked to by the parties. Id.

The relevant jurisdictional provision in a whistleblower case is

section 7623(b)(4). It provides that “[a]ny determination regarding an

award under [section 7623(b)](1), (2), or (3) may . . . be appealed to the

Tax Court (and the Tax Court shall have jurisdiction with respect to

such matter).” I.R.C. § 7623(b)(4). Determinations under those

provisions generally are made by the WBO, which reviews

whistleblower claims to determine whether an award will be paid and,

if so, decides the amount of the award. See, e.g., I.R.C. § 7623(b)(1),

(2)(A), (3).

Tax Court Precedent

Based on the plain text of section 7623(b)(4), it is clear that our

Court has jurisdiction over any appeal of a determination that a

award by the Whistleblower Office shall depend upon the extent to

which the individual substantially contributed to such action.

whistleblower is entitled to an award under section 7623(b)(1).

Additionally, we have interpreted section 7623(b)(4) as granting our

Court jurisdiction over cases where the WBO rejects or denies a

whistleblower’s claim. 3 See Lacey v. Commissioner, 153 T.C. 146, 163

n.19 (2019) (“[A] denial or rejection is a (negative) ‘determination

regarding an award’, so the Tax Court has jurisdiction where, pursuant

to the WBO’s determination, the individual does not receive an award.”),

abrogated by Li v. Commissioner, 22 F.4th 1041; see also Cooper v.

Commissioner, 135 T.C. 70, 75 (2010) (“The statute expressly permits an

individual to seek judicial review in [the Tax] Court of the amount or

denial of an award determination.” (citing Staff of Joint Comm. on

Taxation, Technical Explanation of H.R. 6408, The “Tax Relief and

Health Care Act of 2006,” at 89 (J. Comm. Print 2006)), abrogated by 22

F.4th 1041. Our Court has held that jurisdiction exists regardless of

whether the Commissioner proceeds with an action or collects proceeds

based on the whistleblower’s information. See Lacey, 153 T.C. at 169

(stating that the Court’s review of a WBO determination to reject a claim

without taking action is not preempted by the absence of “action” and

“proceeds,” which will always be absent when the WBO rejects a claim

at the threshold). But the D.C. Circuit in Li v. Commissioner, 22 F.4th

1014, established new precedent on this point. 4

Li v. Commissioner

In Li, the D.C. Circuit disagreed—at least in part—with our prior

interpretations of section 7623(b)(4). Pointing to the statutory text, the

court of appeals concluded that the Tax Court does not have jurisdiction

to review the WBO’s threshold rejection of a whistleblower claim. Id.

at 1017. The D.C. Circuit reasoned that the WBO makes an award

determination “under [section 7623](b)(1)” when the IRS actually

proceeds with an action based on a whistleblower’s information. Id. In

the case of a rejection, the WBO rejects the whistleblower’s claim at the

threshold, without the IRS’s ever taking action against the target

taxpayer. Id. Therefore, the D.C. Circuit concluded, the WBO’s decision

to reject a claim is not an award determination under section 7623(b)(1),

(2), or (3), and the Tax Court does not have jurisdiction to review that

3 For a discussion of rejections and denials, see Rogers v. Commissioner, 157

T.C. 20, 22–31 (2021).

4 Absent a stipulation by the parties, this case would be appealable to the D.C.

Circuit. See I.R.C. § 7482(b)(1) (flush text) (providing that the D.C. Circuit is the

proper appellate venue for review of Tax Court decisions in cases in which no other

venue rule applies); see also Kasper, 150 T.C. at 11 n.1.

decision under section 7623(b)(4). Id. (“The WBO did not forward Li’s

Form 211 to an IRS examiner for further action, and the IRS did not

take any action against the target taxpayer. There was no proceeding

and thus no ‘award determination’ by the IRS for Li’s whistleblower

information. Therefore, the Tax Court had no jurisdiction to review the

WBO’s threshold rejection of Li’s Form 211.”).

Application to This Case

The D.C. Circuit’s decision in Li addressed threshold rejections,

and the court explicitly noted that it did not decide whether our Court

would have jurisdiction over a case in which the IRS proceeded against

a target taxpayer based on a whistleblower’s information, but the WBO

wrongly denied the whistleblower’s application for an award. Id. at 1017

n.2. This essentially is what the whistleblower alleges took place in the

case before us. Based on the text of section 7623(b) and the reasoning

in Li, we conclude that we have jurisdiction to review the WBO’s

determination.

As we have described, section 7623(b)(4) grants the Tax Court

jurisdiction over an appeal of “[a]ny determination regarding an award

under [section 7623(b)](1), (2), or (3).” Section 7623(b)(1) provides that

a whistleblower generally is entitled to an award when the Secretary

proceeds with an action based on information provided by the

whistleblower and collects proceeds.

In Li, the D.C. Circuit determined that we did not have

jurisdiction because the most basic threshold specified in section

7623(b)(1) had not been crossed—i.e., the IRS had not proceeded with

an action against the target taxpayers. 5 By contrast, the parties in the

case before us agree that the Commissioner proceeded with an action.

Indeed, here the Commissioner collected proceeds with respect to each

of the three target taxpayers identified by the whistleblower. But the

WBO determined that the whistleblower was not entitled to an award

despite these facts. The question we must decide is whether that

determination constituted “[a]ny determination regarding an award

under [section 7623(b)](1).” Consistent with Li, we conclude that it did.

The D.C. Circuit observed in Li that “an award determination by

the IRS arises only when the IRS ‘proceeds with any administrative or

5 Because the IRS had not proceeded with an action, it also had not collected

proceeds.

judicial action described in subsection (a) based on information brought

to the Secretary’s attention by [the whistleblower] . . . .’ ” Li v.

Commissioner, 22 F.4th at 1017 (quoting I.R.C. § 7623(b)(1)). A

determination that no award is warranted even though the IRS has

proceeded with an action and collected proceeds in that action is still a

“determination regarding an award.” 6 Indeed, it would make little sense

for Congress to authorize judicial review for whistleblowers who receive

wrongfully reduced awards, but not for whistleblowers who are

wrongfully denied an award altogether after the threshold requirements

of section 7623(b)(1) are met.

The inclusion in section 7623(b)(4) of an express reference to

section 7623(b)(3) supports this conclusion.

Section 7623(b)(4)

specifically establishes our jurisdiction to review determinations under

section 7623(b)(3). As relevant here, section 7623(b)(3) provides that the

WBO shall “deny any award” if a claim is brought “by an individual who

planned and initiated the actions that led to the underpayment of tax”

on which the award would be based and that individual “is convicted of

criminal conduct arising from [that] role.” The combined effect of section

7623(b)(3) and (4) is that a whistleblower who has been denied an award

on the ground that the whistleblower was convicted of criminal conduct

arising from planning the actions that led to the understatement of tax

may challenge that determination in our Court even though the WBO

issued no award. Put another way, paragraphs (3) and (4) of section

7623(b) make clear that a WBO determination not to grant an award

after the IRS has taken action against a target taxpayer and collected

proceeds as a result of the action can be subject to our review.

Similarly, and consistent with Li, we hold that when the WBO

determined that the whistleblower here was not entitled to an award

even though the Government had proceeded with actions against the

target taxpayers and collected proceeds, the WBO made a determination

regarding an award under section 7623(b)(1). By the terms of section

7623(b)(4), we have jurisdiction over an appeal of that determination.

6 The parties agree that the IRS took action and collected proceeds in this case,

and so we need not decide whether, under Li, we would have jurisdiction to review a

WBO denial in a case in which the IRS proceeded with an action, but did not collect

proceeds, or in which the IRS did not proceed with an action. A case presenting both

these fact patterns is currently pending before the D.C. Circuit. See Kennedy v.

Commissioner, T.C. Memo. 2021-3, appeal docketed, No. 21-113 (D.C. Cir. June 7,

2021).

Based on certain statements in Li, one might argue that all the

elements of section 7623(b)(1)—including the requirement that any

action be in fact “based on the whistleblower’s information”—are

jurisdictional. But that’s not what the D.C. Circuit decided in Li; rather,

its holding is confined to threshold rejections in which the IRS takes no

action. See Li v. Commissioner, 22 F.4th at 1017. A case like this one,

where the IRS has both acted and collected proceeds, raises

jurisdictional considerations not present in Li.

Specifically, if we were to read Li as requiring our Court to make

a factual determination that the IRS proceeded against a target and

collected proceeds from that target “based on” the whistleblower’s

information simply to establish our jurisdiction over the appeal of the

WBO decision, then every case in which the WBO denies a claim on the

ground that the information provided by the whistleblower was not

useful to the IRS would require a full determination of the merits before

we would know whether we had jurisdiction to begin with. Put a

different way, if our jurisdiction to review the WBO’s decision not to

make an award in a case that involved both an examination of the

taxpayer and the collection of proceeds exists only if it turns out

(contrary to the WBO’s conclusion) that the recovery was in fact “based

on” the whistleblower’s information, then (in cases involving the fact

pattern now before us) the whistleblower would win on the merits in

virtually every case over which we have jurisdiction (except perhaps

those subject to section 7623(b)(3)), and we would have no jurisdiction

in virtually every case that the whistleblower would otherwise lose on

the merits. See I.R.C. § 7623(b)(1) (providing that if the Secretary

proceeds with an action based on the whistleblower’s information, the

whistleblower “shall” receive an award).

Additionally, any proceeding to establish whether an action was

“based on” the whistleblower’s information for jurisdictional purposes

would raise complicated questions regarding the scope and standard of

our review. In particular, while we generally review whistleblower

determinations for abuse of discretion based on the administrative

record, see Kasper, 150 T.C. at 20, 22, courts in other contexts have

employed different standards when jurisdictional and merits issues are

intertwined, see, e.g., 2 James W. Moore et al., Moore’s Federal Practice

§ 12.30[3], at 12-50.2(11) (3d ed. 2021) (“When the jurisdictional facts

are too intertwined with the merits to permit the determination to be

made independently, the court should either employ the standard

applicable to a motion for summary judgment (if the material

jurisdictional facts are undisputed) or leave the jurisdictional

determination to trial.”); see also, e.g., Herbert v. Nat’l Acad. Of Sci., 974

F.2d 192, 198 (D.C. Cir. 1992) (“[T]hough the trial court may rule on

disputed jurisdictional facts at any time, if they are inextricably

intertwined with the merits of the case it should usually defer its

jurisdictional decision until the merits are heard.” (citing Land v. Dollar,

330 U.S. 731 (1947))); Kerns v. United States, 585 F.3d 187, 193 (4th Cir.

2009) (“[W]hen the jurisdictional facts are inextricably intertwined with

those central to the merits, the court should resolve the relevant factual

disputes only after appropriate discovery . . . .”); Lawrence v. Dunbar,

919 F.2d 1525, 1528–29 (11th Cir. 1990) (explaining that a case in which

a fact “is a necessary predicate to the court’s subject matter jurisdiction”

as well as “an element the plaintiff must establish to win the case,” the

“proper course of action . . . is to find that jurisdiction exists and deal

with the objection as a direct attack on the merits of the plaintiff’s case”

(citations omitted) (quoting Williamson v. Tucker, 645 F.2d 404, 415 (5th

Cir. 1981)). We do not read Li, which expressly declined to reach fact

patterns in which the IRS proceeds with an action, see Li v.

Commissioner, 22 F.4th at 1017 n.2., to sweep so broadly as to require

trials on the merits to determine jurisdiction in all zero-award

whistleblower cases in which the IRS has proceeded with an action and

collected proceeds.

Having established that we have jurisdiction to hear this case, we

next consider whether section 6103 authorizes the Commissioner to

submit an unredacted copy of the administrative record to the Court. As

discussed further below, we conclude that it does.

III.

Section 6103

General Principles

As we have said, section 6103(a) provides that returns and return

information generally must be kept confidential unless disclosure is

specifically authorized by the Code. See Mescalero Apache Tribe v.

Commissioner, 148 T.C. 291, 294 (2017). The authorization at issue here

is section 6103(h)(4), which provides, in relevant part:

A return or return information may be disclosed in a

Federal or State judicial or administrative proceeding

pertaining to tax administration, but only—

(A) if the taxpayer is a party to the

proceeding, or the proceeding arose out of, or in

connection with, determining the taxpayer’s civil or

criminal liability, or the collection of such civil

liability, in respect of any tax imposed under this

title;

(B) if the treatment of an item reflected on

such return is directly related to the resolution of an

issue in the proceeding; [or]

directly relates to a transactional relationship

between a person who is a party to the proceeding

and the taxpayer which directly affects the

resolution of an issue in the proceeding . . . .[7]

The statute then proceeds to provide its own limitation on

disclosure: A “return or return information shall not be disclosed as

provided in subparagraph (A), (B), or (C) if the Secretary determines

that such disclosure would identify a confidential informant or seriously

impair a civil or criminal tax investigation.” I.R.C. § 6103(h)(4) (flush

text).

There is no dispute that the documents the Commissioner has

redacted in this case are either returns or return information protected

by section 6103(a). 8 Similarly, the parties agree that this case is a

federal judicial proceeding that pertains to tax administration. 9 See

Confidential Informant 92-95-932X v. United States, 45 Fed. Cl. 556, 559

(2000) (holding that a whistleblower’s suit seeking, among other things,

a declaratory judgment related to a contract entered into with the IRS

was a proceeding involving tax administration); see also Treas. Reg.

§ 301.6103(h)(4)-1(a) (“A whistleblower administrative proceeding . . . is

an administrative proceeding pertaining to tax administration within

the meaning of section 6103(h)(4).”). And neither party asserts that the

7 Section 6103(h)(4)(D) also authorizes disclosure “to the extent required by

order of a court pursuant to section 3500 of title 18, United States Code, or rule 16 of

the Federal Rules of Criminal Procedure.” The parties agree that section 6103(h)(4)(D)

is not relevant here.

8 Section 6103(b)(1) and (2) provides detailed definitions for both terms.

Church of Scientology of Cal. v. IRS, 484 U.S. 9, 12 (1987).

See

9 Section 6103(b)(4) provides a broad definition of “tax administration.” See,

e.g., Gardner v. United States, 213 F.3d 735, 739 (D.C. Cir. 2000) (referring to the

“broad language” of the provision); United States v. Mangan, 575 F.2d 32, 40 (2d Cir.

1978) (describing the definition as “so sweeping as to compel rejection of a restrictive

interpretation”).

statutorily provided restriction from disclosure set out in the flush text

of section 6103(h)(4) applies here. The only dispute, therefore, is

whether at least one of the three subparagraphs of section 6103(h)(4) set

out above applies.

The Commissioner argues that portions of the returns and return

information included in the administrative record fall within

subparagraph (B) because they are directly related to the resolution of

an issue in this proceeding—i.e., whether the WBO erred when it denied

the whistleblower’s claim for an award. 10 The Commissioner did not

redact these “directly related” items when he filed the administrative

record with our Court, but he did redact other information that in his

view was not directly related to the resolution of this proceeding.

With respect to the redacted information, the whistleblower

contends that subparagraphs (A), (B), and (C) of section 6103(h)(4) all

authorize disclosure. The Commissioner contends that none of the three

subparagraphs applies. As explained further below, we agree with the

whistleblower that subparagraph (A) authorizes disclosure of the

redacted information and therefore do not address the potential

application of subparagraphs (B) and (C). See Tavery, 32 F.3d at 1430

(noting that the exceptions in section 6103(h)(4) are disjunctive and

declining to go further once one exception was found to apply).

Section 6103(h)(4)(A)

Section 6103(h)(4)(A) authorizes the disclosure of tax returns or

return information in a federal judicial proceeding pertaining to tax

administration if “the taxpayer is a party to the proceeding, or the

proceeding arose out of, or in connection with, determining the

taxpayer’s civil or criminal liability.” At issue here are returns and

return information of taxpayers 1, 2, and 3, who are not parties to this

case. Accordingly, section 6103(h)(4)(A) will apply only if this case

“arose out of, or in connection with” determining the civil or criminal

10 As the Commissioner recognizes, the courts of appeals have reached different

conclusions on whether section 6103(h)(4)(B) permits the disclosure of returns only or

returns and return information. Compare United States v. NorCal Tea Party Patriots

(In re United States), 817 F.3d 953, 962 (6th Cir. 2016) (concluding that section

6103(h)(4)(B) permits the disclosure of returns only), and In re United States, 669 F.3d

1333, 1339–40 (Fed. Cir. 2012) (per curiam) (suggesting the same), with Tavery v.

United States, 32 F.3d 1423, 1430 (10th Cir. 1994) (allowing the disclosure of return

information under section 6103(h)(4)(B)). The D.C. Circuit has not spoken on this

issue.

liabilities of taxpayers 1, 2, and 3 in respect of any tax imposed under

the Code.

“In Connection With”

Because the phrase “arose in connection with determining a

taxpayer’s civil or criminal liability” is broader than the phrase “arose

out of determining the taxpayer’s civil or criminal liability,” see, e.g., N.

Am. Butterfly Ass’n v. Wolf, 977 F.3d 1244, 1260 (D.C. Cir. 2020) (“[T]he

phrase ‘arising out of ’ sweeps less broadly than ‘in connection with’ or

‘in relation to.’ ”), we turn our attention to the meaning of the phrase “in

connection with.”

We begin with first principles.

explained:

As the Supreme Court has

In statutory interpretation disputes, a court’s proper

starting point lies in a careful examination of the ordinary

meaning and structure of the law itself. Schindler Elevator

Corp. v. United States ex rel. Kirk, 563 U.S. 401, 407 (2011).

Where . . . that examination yields a clear answer, judges

must stop. Hughes Aircraft Co. v. Jacobson, 525 U.S. 432,

438 (1999).

Food Mktg. Inst. v. Argus Leader Media, 139 S. Ct. 2356, 2364 (2019).

And, when the statute does not define a term, “we ask what that term’s

‘ordinary, contemporary, common meaning’ was when Congress

enacted” the relevant provision. Id. at 2362 (quoting Perrin v. United

States, 444 U.S. 37, 42 (1979)).

Section 6103 does not define the phrase “in connection with.” But

when section 6103(h)(4)(A) was enacted in 1978, see Revenue Act of

1978, Pub. L. No. 95-600, § 503, 92 Stat. 2763, 2880, the term

“connection” was defined broadly (and in relevant part) to mean any

link, association, or relationship, see, e.g., Connection, The American

Heritage Dictionary of the English Language, New College Edition

(1976) (“2. Anything that joins, relates, or connects; a bond; a link. 3. An

association, alliance, or relation . . . .”); 11 see also Fort Howard Corp. &

11 Dictionary definitions of “connection” have remained relatively consistent

over time. See, e.g., Connection, Webster’s New Twentieth Century Dictionary of the

English Language (2d ed. 1966) (defining “connection,” in relevant part, as “that which

connects or unites; a tie; a bond; means of joining” and “a relation; association;

Subs. v. Commissioner, 103 T.C. 345, 351–52 (1994) (citing Webster’s

Third New International Dictionary 480 (1986)), supplemented by 107

T.C. 187 (1996).

This definition is consistent with interpretations of the phrase “in

connection with” by various courts over time, including ours. The Tax

Court has interpreted the phrase “in connection with” as meaning

“related to.” See Adams Challenge (UK) Ltd. v. Commissioner, 154 T.C.

37, 63 (2020) (analyzing relevant cases and concluding that there is no

appreciable difference between the two phrases). Courts of appeals,

including the D.C. Circuit, have reached the same conclusion. See, e.g.,

Azima v. RAK Inv. Auth., 926 F.3d 870, 877 (D.C. Cir. 2019) (collecting

authorities and stating that “ ‘in connection with’ . . . is equivalent to ‘in

relation to’ ”); see also John Wyeth & Brother Ltd. v. Cigna Int’l Corp.,

119 F.3d 1070, 1074 (3d Cir. 1997) (Alito, J.) (explaining that “a dispute

‘arise[s] . . . in relation to’ ” an agreement if “the origin of the dispute is

related to that agreement, i.e., [if] the origin of the dispute has some

‘logical or causal connection’ ” to the agreement (quoting Webster’s Third

New International Dictionary 1916 (1971))). 12 Accordingly, as the

Supreme Court and the D.C. Circuit have acknowledged, the phrase “in

connection with” establishes a standard that is “quite broad.” Azima,

926 F.3d at 878; see also Mont v. United States, 139 S. Ct. 1826, 1832

(2019) (“The Court has often recognized that ‘in connection with’ can

bear a ‘broad interpretation.’ ” (quoting Merrill Lynch, Pierce, Fenner &

Smith Inc. v. Dabit, 547 U.S. 71, 85 (2006))).

specifically, (a) the relation between things that depend on, involve, or follow each

other”); Connection, The Random House College Dictionary (1980) (“3. anything that

connects; link; bond. 4. association; relationship . . . .”); Connection, The American

Heritage Dictionary of the English Language (3d ed. 1992) (defining “connection,” in

relevant part, to mean “[o]ne that connects; a link,” “[a]n association or a relationship,”

or a “reference or relation to something else”); Connection, The American Heritage

Dictionary of the English Language (5th ed. 2016) (same).

Additionally, modern dictionaries sometimes define “in connection with” as an

idiom meaning “in relation to.” See, e.g., Connection, The American Heritage

Dictionary of the English Language (5th ed. 2016).

12 For additional authorities, see also Huntsman v. Commissioner, 905 F.2d

1182, 1184 (8th Cir. 1990) (interpreting “in connection with” to mean having “an

‘association’ or ‘relation’ with”), rev’g 91 T.C. 917 (1988), and Coregis Ins. Co. v. Am.

Health Found., Inc., 241 F.3d 123, 128–29 (2d Cir. 2001) (Sotomayor, J.) (noting that

the term “relation” is defined as a “connection” or “reference” to, and that courts have

described the term “relating to” as equivalent to the phrases “in connection with” and

“associated with”).

We are mindful, however, that, as the Supreme Court observed in

interpreting another statute involving the disclosure of personal

information, “[t]he phrase ‘in connection with’ ” can also be read as

“essentially ‘indeterminat[e]’ because connections, like relations, ‘ “stop

nowhere.” ’ ” Maracich v. Spears, 570 U.S. 48, 59–60 (2013) (quoting N.Y.

State Conf. of Blue Cross & Blue Shield Plans v. Travelers Ins. Co., 514

U.S. 645, 655 (1995)). 13 Therefore, in interpreting that phrase, we must

as always consider “the structure of the statute and its other provisions.”

Id. at 60 (citing N.Y. State Conf. of Blue Cross & Blue Shield Plans, 514

U.S. at 656); see id. at 88 (Ginsburg, J., dissenting) (“I agree with the

Court that the words ‘in connection with’ must be contained within

reasonable bounds.”); see also Culbertson v. Berryhill, 139 S. Ct. 517, 522

(2019) (applying the same statutory interpretation principle). 14

13 Maracich involved the interpretation of the Driver’s Privacy Protection Act

of 1994 (DPPA). See 18 U.S.C. §§ 2721–2725. The DPPA governs the disclosure of

personal information in the records of state motor vehicle departments (DMV).

Maracich, 570 U.S. at 52. The DPPA prohibits the disclosure of personal information

unless the disclosure is for a purpose covered by one of 14 statutory exceptions. Id.

The provision at issue in the case, 18 U.S.C. § 2721(b)(4), allowed disclosure

[f]or use in connection with any civil, criminal, administrative, or

arbitral proceeding in any Federal, State, or local court or agency or

before any self-regulatory body, including the service of process,

investigation in anticipation of litigation, and the execution or

enforcement of judgments and orders, or pursuant to an order of a

Federal, State, or local court.

The question before the Court was whether lawyers who served as counsel in

a class action against South Carolina car dealers permissibly “obtained names and

addresses of thousands of individuals from the South Carolina DMV in order to send

letters to find plaintiffs for a lawsuit they had filed against car dealers for violations

of South Carolina law.” Maracich, 570 U.S. at 52. In a five-to-four decision, the Court

held that, “[i]n light of the text, structure, and purpose of the DPPA,” “an attorney’s

solicitation of clients is not a permissible purpose covered by the (b)(4) litigation

exception.” Id. The four dissenting justices “would read [the] statutory language to

permit use of DMV information tied to a specific, concrete proceeding, imminent or

ongoing, with identified parties on both sides of the controversy.” Id. at 81 (Ginsburg,

J., dissenting).

14 The Supreme Court has “eschewed uncritical literalism leading to results

that no sensible person could have intended” “when confronted with capacious

phrases” like “in connection with,” “related to,” and “arising from.” Jennings v.

Rodriguez, 138 S. Ct. 830, 840 (2018) (Alito, J.) (plurality opinion) (cleaned up)

(collecting authorities); see also FERC v. Elec. Power Supply Ass’n, 577 U.S. 260, 278

(2016, revised Jan. 28, 2016) (“As we have explained in addressing similar terms like

‘relating to’ or ‘in connection with,’ a non-hyperliteral reading is needed to prevent the

Additionally, following the Supreme Court’s lead, we must

exclude from the scope of section 6103(h)(4)(A) those proceedings that

have only a “remote relation to” the determination of a taxpayer’s

liability. Maracich, 570 U.S. at 59; see id. at 89 (Ginsburg, J.,

dissenting) (“[W]hen the Court has sought a limiting principle for

similar statutory language, it has done so to prevent the application of

a statute to matters with ‘only a tenuous, remote, or peripheral

connection’ to the statute’s core purpose.” (quoting N.Y. State Conf. of

Blue Cross & Blue Shield Plans, 514 U.S. at 661)). At the same time,

“we need not consider the outer bounds of the term ‘in connection with’ ”

when the matters under review are “directly tied” to one another. Mont,

139 S. Ct. at 1832.

Applying these principles in the context of section 6103, we have

no difficulty concluding that this case arose “in connection with” (i.e., in

relation to) determining the civil or criminal liabilities of taxpayers 1, 2,

and 3 and is therefore within the scope of section 6103(h)(4)(A). When,

as here, a whistleblower provides information to the IRS on a target

taxpayer and the IRS proceeds with an action and collects proceeds from

that target taxpayer, the decision whether to grant the whistleblower

an award—as well as our eventual review of that decision—is

inextricably linked with determining the target taxpayer’s civil or

criminal liability for at least two reasons.

To begin with, the IRS’s action in determining the target

taxpayer’s liability and the outcome of that action (including the

collection of additional tax) are clear but-for causes of the proceeding

before the Court. Indeed, under the reasoning of Li v. Commissioner, 22

F.4th at 1017, the existence of an IRS action to determine the liabilities

of the target taxpayer is a prerequisite to our jurisdiction to hear any

whistleblower case, including this one. In that very direct sense,

therefore, this case arose “in connection with” the IRS actions that

determined the taxpayers’ liabilities: we could not hear the case without

the actions.

Additionally, what the IRS determined with respect to the target

taxpayers and what it collected from those taxpayers are key inquiries

in analyzing the merits of this proceeding, which is focused on

evaluating “the extent to which the [whistleblower] substantially

statute from assuming near-infinite breadth.” (first citing N.Y. State Conf. of Blue

Cross & Blue Shield Plans, 514 U.S. at 656; and then citing Maracich, 570 U.S. at 59));

Elec. Power Supply Ass’n, 577 U.S. at 296 (Scalia, J., dissenting) (agreeing that the “socalled ‘affecting’ jurisdiction cannot be limitless”).

contributed to [the IRS’s] actions,” I.R.C. § 7623(b)(1)—i.e., the actions

to “detect[ ] underpayments of tax, or . . . detect[ ] and bring[ ] to trial and

punishment persons guilty of violating the internal revenue laws or

conniving at the same,” I.R.C. § 7623(a)(1) and (2). Essentially, the

particulars of the IRS’s actions that determined the target taxpayer’s

liabilities will decide the outcome of this case. Given this reality, it is

hard to see how one can resist the conclusion that this judicial

proceeding arose in connection with (and is quite closely related to)

determining the target taxpayers’ liabilities or the collection of those

liabilities. The entire case is predicated on the whistleblower’s assertion

that the whistleblower’s efforts gave rise to (or at least contributed to)

the IRS’s actions against the target taxpayers and substantially

contributed to the IRS’s determination that more tax was owed and to

its ultimate collection. In that context, the proceeding has a very strong

“logical or causal connection” to the IRS’s determination of the target

taxpayers’ liability and, as then-Judge Alito concluded in a similar

context, arose in connection with (or in relation to) that determination.

John Wyeth & Brother Ltd., 119 F.3d at 1074 (quoting Webster’s Third

New International Dictionary 1916 (1971)).

In short, the strength of the connection present here is more than

enough to satisfy the “quite broad” standard recognized by the case

law, 15 see Azima, 926 F.3d at 878, and ensures that section 6103(h)(4)(A)

is not interpreted to assume impermissible, “near-infinite breadth,” 16

see Elec. Power Supply Ass’n, 577 U.S. at 278. We therefore conclude

that this case arose in connection with determining the civil or criminal

liabilities of taxpayers 1, 2, and 3 and that section 6103(h)(4)(A)

authorizes disclosure of the administrative record.

15 The connection here, for example, is at least as strong as the connection in

Mont, 139 S. Ct. at 1832, in which the Supreme Court held that “the phrase

[imprisonment] ‘in connection with a conviction’ encompasses a period of pretrial

detention for which a defendant receives credit against the sentence ultimately

imposed” because the “pretrial incarceration is directly tied to the conviction when it

is credited toward the new sentence.”

16 We note in this regard that the Supreme Court has interpreted similar

statutory text to allow for the disclosure of sensitive third-party information in the

context of litigation. See Maracich, 570 U.S. at 64–65 (noting that the exception under

18 U.S.C. § 2721(b)(4) “allows use of the most sensitive kind of information, including

medical and disability history and Social Security numbers” “for investigation in

anticipation of litigation and in the litigation itself” (emphasis added)).

The Commissioner’s Arguments

The Commissioner appears to acknowledge that the plain text of

section 6103(h)(4)(A) supports our conclusion, conceding in his briefing

that his own interpretation is “narrower in scope than the plain

language implies.” Resp’t’s Mem. 17–18 (Doc. 121). But he contends

that section 6103(h)(4)(A) is ambiguous. And, given that predicate, the

Commissioner urges us to turn to legislative history and the purpose of

section 6103 to discern its meaning. These, the Commissioner argues,

prove that the use of the phrase “arose out of, or in connection with” in

section 6103(h)(4)(A) “must denote” the following circumstances:

[P]roceedings in which the party seeking disclosure of a

nonparty’s return information faces some legally

enforceable liability, obligation, or sanction at the hands of

the government (as opposed to a non-government litigant);

and, where the party and non-party have a relationship or

connection that existed prior to, and independent of, the

proceedings themselves.

Resp’t’s Mem. 22–23. The Commissioner goes on to conclude that

whistleblower cases do not satisfy this standard.

We need not decide whether the predicate of the Commissioner’s

arguments—that section 6103(h)(4)(A) is ambiguous—is correct. Even

if we were to grant that predicate for the sake of analysis, but see Food

Mktg. Inst., 139 S. Ct. at 2364 (“Even [members of the Supreme Court]

who sometimes consult legislative history will never allow it to be used

to ‘muddy’ the meaning of ‘clear statutory language.’ ” (quoting Milner v.

Dep’t of Navy, 562 U.S. 562, 572 (2011))); Maracich, 570 U.S. at 76

(“[T]he surrounding text and structure of the DPPA resolve any

ambiguity in [the] phrases ‘in connection with’ and ‘investigation in

anticipation of litigation’ in (b)(4).”), the Commissioner’s arguments do

not carry the day.

Legislative History

The Commissioner argues that examples from the legislative

history of a parallel provision in section 6103(h) show that Congress had

a more limited understanding of section 6103(h)(4)(A). 17 We are not

persuaded.

We note first that the legislative history relates to a parallel

provision, not the one actually before us. But even if one accepts that

legislative history as probative to the meaning of the text before us, the

conference report the Commissioner cites simply provides some

illustrative examples of circumstances that would fall within the

parallel provision. See H.R. Rep. No. 95-1800, at 293 (1978) (Conf. Rep.),

reprinted in 1978-3 C.B. (Vol. 1) 521, 627. 18 The conference report does

not purport to provide an exhaustive account of the provision’s

application or discuss circumstances that would not be covered. See id.

In other words, the legislative history provides no indication that it was

“clearly intended to be an all-inclusive expression of what [either the

parallel provision or] the section [before us] covers.” Ryan v. Bureau of

Alcohol, Tobacco & Firearms, 715 F.2d 644, 649 (D.C. Cir. 1983) (Scalia,

J.). As the Supreme Court explained in Encino Motorcars, LLC v.

Navarro, 138 S. Ct. 1134, 1143 (2018):

Even for those Members of this Court who consider

legislative history, silence in the legislative history, “no

matter how ‘clanging,’ ” cannot defeat the better reading of

the text and statutory context. Sedima, S.P.R.L. v. Imrex

Co., 473 U.S. 479, 495, n.13 (1985). If the text is clear, it

needs no repetition in the legislative history; and if the text

is ambiguous, silence in the legislative history cannot lend

any clarity. See Avco Corp. v. Department of Justice, 884

F.2d 621, 625 (DC. Cir. 1989).

17 The parallel provision, section 6103(h)(2)(A), deals with the disclosure of

returns and return information to the Department of Justice for use in connection with

investigations and state and federal proceedings.

18 The conference report states, in relevant part:

[T]he return of a taxpayer who is not a party to the proceeding may be

made available to the Department of Justice if the proceeding arose out

of, or in connection with, determining the taxpayers’ civil or criminal

tax liability or the collection of civil tax liability. This provision would

apply in such situations as where the taxpayer’s liability may have

given rise to transferee liability or where the taxpayer did not (or was

unable to) intervene in a summons enforcement case.

H.R. Rep. No. 95-1800, at 293 (Conf. Rep.), 1978-3 C.B. (Vol. 1) at 627.

In short, even “[f]or those who consider legislative history relevant,”

Warger v. Shauers, 574 U.S. 40, 48 (2014), the legislative history here is

fully consistent with our interpretation of section 6103(h)(4)(A). See,

e.g., Church of Scientology of Cal. v. IRS, 792 F.2d 153, 162 n.4 (D.C.

Cir. 1986) (Scalia, J.) (“Legislative history is used to clarify the meaning

of a text, not to create extra-statutory law. If it can ever be the basis for

plainly departing from the text, it assuredly cannot be so when an

interpretation that honors both the text and the history is available.”),

aff’d, 484 U.S. 9 (1987).

Statutory Purpose

The Commissioner also invokes the purpose of section 6103,

arguing that our interpretation of section 6103(h)(4)(A) would allow “the

unfettered disclosure” of return information to “any whistleblower who

might file a Tax Court appeal,” resulting in “wholesale, unregulated

access to return information of any taxpayer that a whistleblower might

choose to target.”

Resp’t’s Mem. 19–20.

This outcome, the

Commissioner contends, would be contrary to the overarching purpose

of section 6103, which in the Commissioner’s view is to “restrict access

to return information within well-defined limits.” 19 Id. at 18. We

disagree for at least four reasons.

First, the general rule of section 6103 and that provision’s

numerous exceptions reflect Congress’s balancing of competing

interests: (1) the interest of taxpayers in maintaining the confidentiality

of their returns and return information and (2) the interests of others

whose rights might be affected by the information. See, e.g., Gardner,

213 F.3d at 738 (citing Nat’l Treasury Emps. Union v. FLRB, 791 F.2d

183, 184 (D.C. Cir. 1986)). Congress chose to include exceptions in

section 6103, demonstrating that the confidentiality of returns and

return information must sometimes give way to other interests. See id.

Giving effect to those exceptions does not undermine the purpose of

section 6103 as the Commissioner contends; rather, it respects the

balance struck by Congress. 20 See Food Mktg. Inst., 139 S. Ct. at 2366;

19 We note that several cases cited by the Commissioner to support his view of

the purpose of section 6103 actually support the whistleblower. See, e.g., McSurely v.

McAdams, 502 F. Supp. 52 (D.D.C. 1980) (applying a broad exception to permit

disclosure); Shell Petroleum, Inc. v. United States, 47 Fed. Cl. 812 (2000) (same).

20 Congress is, of course, free to change the balance it has struck and, if it

considers it advisable, establish greater protections for targets of whistleblower claims,

including, for example, providing that such targets be notified before their returns or

see also Encino Motorcars, 138 S. Ct. at 1142 (“[T]he FLSA has over two

dozen exemptions in § 213(b) alone, including the one at issue here.

Those exemptions are as much a part of the FLSA’s purpose as the

overtime-pay requirement. See [Henson v. Santander Consumer USA

Inc., 137 S. Ct. 1718,] 1725 [(2017)] (‘Legislation is, after all, the art of

compromise, the limitations expressed in statutory terms often the price

of passage’). We thus have no license to give the exemption anything

but a fair reading.”).

Second, with respect to the exception in section 6103(h)(4)(A)

specifically, Congress selected a broad phrase when it drafted the

provision. See United States v. Am. Trucking Ass’ns, 310 U.S. 534, 543

(1940) (“There is . . . no more persuasive evidence of the purpose of a

statute than the words by which the legislature undertook to give

expression to its wishes.”). As the D.C. Circuit has observed, the mere

fact that a standard is broad does not suggest that we should adopt a

more limited reading. See Azima, 926 F.3d at 878 (“[A]lthough we agree

that ‘in connection with’ is quite broad, we fail to see why that requires

us to limit its scope.”). If Congress intended to adopt a narrower

standard, it could have easily used different language or provided other

textual or structural clues. See id.; see also Maracich, 570 U.S. at 60.

Furthermore, “[e]ven if Congress did not foresee all of the applications

of the statute, that is no reason not to give the statutory text a fair

reading” in the circumstances here. Encino Motorcars, 138 S. Ct. at

1143 (citing Union Bank v. Wolas, 502 U.S. 151, 158 (1991)).

Third, the flush text in section 6103(h)(4) gives the Secretary

authority to prevent disclosure “if the Secretary determines that such

disclosure would identify a confidential informant or seriously impair a

civil or criminal tax investigation.” Thus, Congress did not leave the

Secretary powerless with respect to disclosures in judicial proceedings.

For example, if the Secretary determines in a particular whistleblower

case that disclosure of a target taxpayer’s return or return information

would seriously impair a tax investigation, the information could be

protected from disclosure. But the Secretary has not made such a

determination in this case. And the text shows that the bar Congress

set for the Secretary’s exercise of her discretion is high. Thus, it would

not be enough for a potential disclosure simply to “impair” a tax

investigation. The disclosure must “seriously” do so, indicating that

Congress generally favored disclosure over nondisclosure in this context

return information is disclosed. But, until Congress does so, this Court must apply the

rules currently reflected in the statute.

when the other requirements of the statute are satisfied. In view of the

text and structure of the statute, we are unauthorized to create

additional exceptions based on amorphous purpose considerations.

Fourth, we do not share the Commissioner’s broad view of our

holding. 21 A number of rules in addition to section 6103 limit the

information available to whistleblowers in the Tax Court. For a start,

to commence a case a whistleblower must appeal a WBO determination

to the Court, and we must have jurisdiction to hear the case. See the

discussion in Part II.D above. Under Li v. Commissioner, 22 F.4th

at 1017, this means the IRS must have at least proceeded with an action

against the target taxpayer. When the IRS does not take action—in a

rejection case, for example—whistleblowers generally will not have

access to returns or return information in a Tax Court proceeding.

Next, even if a whistleblower surmounts this jurisdictional

hurdle, the information available in a whistleblower case generally will

be limited to the administrative record the WBO develops or a properly

supplemented record, because that is the record that is subject to the

Court’s review. See Kasper, 150 T.C. at 20; see also Van Bemmelen v.

Commissioner, 155 T.C. 64, 79 (2020) (noting that in a “ ‘record rule’

whistleblower case” we decide, “as a matter of law, whether the [WBO’s]

action is supported by the administrative record and is not arbitrary,

capricious, an abuse of discretion, or otherwise not in accordance with

law”).

Nothing in section 6103(h)(4)(A) or our holding gives

whistleblowers license to seek returns or return information that the

WBO did not collect as part of its administrative process. That such

documents might exist in the hands of the IRS generally or in the files

of an examination team that audited a target taxpayer does not (without

more) make those documents part of the administrative record and

triggers no need for an evaluation under section 6103(h)(4)(A). See

Treas. Reg. § 301.7623-3(e) (describing the contents of the

administrative record in a whistleblower case).

21 The Commissioner argues that interpreting section 6103(h)(4)(A) “as being

broadly inclusive of any and all proceedings connected in any way whatsoever with the

non-party’s tax liability” would render section 6103(h)(4)(B) and (C) superfluous. But

we do not so hold, and our interpretation does not create superfluity. For example, in

an employer’s employment tax dispute, returns or return information of the employer’s

employees potentially could satisfy the requirements of section 6103(h)(4)(B) or (C),

see, e.g., Mescalero Apache Tribe, 148 T.C. at 298–99, but would be unlikely to satisfy

the requirements of section 6103(h)(4)(A) absent some related Government action to

determine the employees’ liabilities.

Contrary to the Commissioner’s contention, therefore, we do not

hold here that every whistleblower should receive unfettered access to

the return information of every target the whistleblower names.

Instead, we hold that where (1) a whistleblower submits information to

the IRS identifying a target taxpayer, (2) the IRS proceeds with an

action against the taxpayer and collects proceeds, (3) the WBO makes a

determination regarding the whistleblower’s entitlement to an award

related to that action (including a determination that no award is

warranted), (4) the whistleblower seeks our review of the WBO’s

determination, (5) our jurisdiction to perform that review depends on

the IRS action that determined the target taxpayer’s tax liability, and

(6) the correctness of the WBO’s determination (and therefore the

outcome of the case before us) turns on the details of the IRS action, then

the whistleblower case “arose . . . in connection with” determining the

taxpayer’s liability as required by section 6103(h)(4)(A). In these specific

circumstances, we conclude that section 6103 does not prohibit

disclosure of the taxpayer’s returns and return information that the

WBO has included in the administrative record supporting its

determination. 22

Regulatory Arguments

The Commissioner concludes his analysis of section 6103(h)(4)(A)

by arguing that the current whistleblower regulations are consistent

with his position. Specifically, he contends that, “to the extent that

existing regulations allow for limited disclosure of . . . return information

to whistleblowers,” these disclosures are authorized by section

6103(h)(4)(B) or (C) rather than section 6103(h)(4)(A). Resp’t’s Mem. 27.

We read the relevant regulations differently. For one thing,

regulations under section 6103 authorize the WBO to disclose returns

and return information to a whistleblower “to the extent necessary to

conduct a whistleblower administrative proceeding,” citing section

6103(h)(4). Treas. Reg. § 301.6103(h)(4)-1(b). The regulations provide

some illustrative examples of information that may be shared, but

specifically state the examples are not exclusive. See id.

22 This conclusion is consistent with the Supreme Court’s observation in

Maracich, 570 U.S. at 64–65, that the exception under 18 U.S.C. § 2721(b)(4) “allows

use of the most sensitive kind of information, including medical and disability history

and Social Security numbers” “for investigation in anticipation of litigation and in the

litigation itself,” even though that exception did not allow disclosure “for the purpose

of soliciting new business.”

Additionally, regulations under section 7623 elaborate that a

whistleblower who signs a confidentiality agreement may schedule an

appointment with the WBO to review any information in the

administrative claim file that is not protected by common law or

statutory privileges. 23 Treas. Reg. § 301.7623-3(c)(4)(i)(B). Initially, the

proposed regulations limited the information that could be viewed in

this manner to “pertinent” information in the file, see Prop. Treas. Reg.

§ 301.7623-3(c)(5), 77 Fed. Reg. 74,798, 74,809 (Dec. 18, 2012), but in

response to a comment that “the whistleblower should be able to review

all non-privileged information in the administrative claim file, whether

or not it is deemed pertinent,” the final regulations dropped the term,

see T.D. 9687, 2014-36 I.R.B. 486, 500.

Apparently then, the regulations would have authorized the

Commissioner to share the administrative claim file underlying this

case, including nonpertinent portions of the file, with the whistleblower

during the whistleblower administrative proceeding associated with the

whistleblower’s claims. Disclosures under section 6103(h)(4)(B) and (C)

are limited by statute to materials “directly related to the resolution of

an issue in the proceeding,” but disclosures under section 6103(h)(4)(A)

are not. This strongly indicates that the regulations rely on section

6103(h)(4)(A) to authorize disclosures in whistleblower administrative

proceedings. 24 And we see no basis in the statute for concluding that

23 The regulations define the “administrative claim file” broadly to include a

list of enumerated materials, see Treas. Reg. § 301.7623-3(e)(2)(i)–(viii), as well as “[a]ll

other information considered by the official making the award determination,” id.

subdiv. (ix).

24 We note that the regulations predate the 2019 enactment of section

6103(k)(13), see Taxpayer First Act of 2019, Pub. L. No. 116-25, § 1405(a), 133 Stat.

981, 997–98 (2019), and therefore that section 6103(k)(13) did not provide the

authorization for their adoption. Section 6103(k)(13) applies to proceedings before the

Secretary that precede a whistleblower’s appeal to our Court. See I.R.C. § 6103(k)(13)

(permitting the disclosure of return information to a whistleblower related to the

investigation of a target taxpayer in certain circumstances, requiring the Secretary to

provide status updates to whistleblowers at certain times, and, upon a whistleblower’s

request, requiring the Secretary to provide updates on the status of the investigation

and disclose the reasons for any award determination under section 7623(b)). As the

Commissioner observed in briefing, section 6103(k)(13) “permits disclosures to be made

‘to any individual providing information relating to any purpose described in

paragraph (1) or (2)’ [of section 7623(a)]. It does not authorize disclosures to the

Court.” Resp’t’s Mot. To Modify Order 9 (Doc. 114). The Commissioner is right that

section 6103(k)(13) says nothing about disclosures to the Court. That topic is covered

by section 6103(h)(4). Consistent with this understanding, when Congress adopted

section 6103(k)(13), it did not restrict the scope of section 6103(h)(4), even though the

section 6103(h)(4)(A) authorizes broader disclosure in administrative

proceedings than in judicial proceedings. In other words, if the

regulations would have authorized the Commissioner to share the

administrative claim file with the whistleblower during the

whistleblower administrative proceeding, we see no basis in

section 6103(h) for the Commissioner to provide less information in a

subsequent judicial proceeding. Thus, the regulations reinforce our

conclusion that section 6103(h)(4)(A) authorizes disclosure of the

administrative record in this case.

Final Considerations

From a broader perspective, the arguments the Commissioner

offers in support of his position reflect an approach that “is a relic from

a ‘bygone era of statutory construction.’ ” Food Mktg. Inst., 139 S. Ct.

at 2364. The Commissioner spends little time with the statutory text or

its ordinary meaning, pivoting almost immediately to legislative history

and purported general policies underlying section 6103(a) (which, as we

have described, offer him no help). He provides no analysis of the

structure or the exceptions to section 6103(a), which are legion and of

course were enacted by Congress. Cf. Maracich, 570 U.S. at 52–70

(relying on the structure of the statute and all the relevant provisions to

determine the meaning of the text at issue). Moreover, the holdings of

several of the cases the Commissioner cites in support of his policy

points turn out to support the whistleblower’s position. And, as

described in the preceding section, the same can be said of the

regulations. Therefore, while the Commissioner’s concern regarding his

responsibilities under section 6103 is laudable, we cannot agree with his

interpretation of the statute.

Our conclusion does not leave taxpayer information contained in

the administrative record the WBO creates without protection. For

example, Rule 27 provides guidance for redacted filings and states that,

for good cause, the Court may require further redactions or issue a

protective order. See Rule 27(a), (d). And Rule 103(a) states that, on a

party’s motion and for good cause shown, “the Court may make any

order which justice requires to protect a party or other person from

same section of the Taxpayer First Act that added section 6103(k)(13) to the Code also

amended section 6103(k)(6) to exclude from its reach disclosures covered by the newly

added section 6103(k)(13). The contrast in Congress’s approach with respect to section

6103(k)(6)—express amendment—and Congress’s approach with respect to section

6103(h)(4)—absolute silence—confirms that the adoption of section 6103(k)(13) did not

affect the authority under section 6103(h)(4).

annoyance, embarrassment, oppression, or undue burden or expense.”

The Commissioner remains free to pursue redaction of the

administrative record pursuant to these rules. But he cannot maintain

that section 6103 prohibits him from complying with the Court’s orders.

Finally, our further review of section 6103(h)(4)(A) as applicable

to this case leads us to conclude that section 6103 considerations do not

warrant an in camera review of the redacted materials. Congress has

already made a determination with respect to them as far as

section 6103 is concerned. They may be disclosed. Unless the Secretary

determines that providing the unredacted information “would identify a

confidential informant or seriously impair a civil or criminal tax

investigation,” I.R.C. § 6103(h)(4) (flush text), the Commissioner may

not resist disclosure by appealing to section 6103(a). The Commissioner

remains free of course to propose more targeted redactions under Rule

27(a) and (d) and Rule 103(a), and we will allow him time to do so if he

considers that appropriate.

IV.

Conclusion

To summarize, the Commissioner’s interpretation of section

6103(h)(4)(A) cannot stand in the face of the broadly worded statutory

exception, the structure of the statute, and the statute’s other

provisions. If Congress had meant to limit the exception as the

Commissioner suggests, it could have used more exacting language and

given different textual and structural clues. The facts of this case fall

well within the bounds of the exception Congress provided, and we must

therefore decline the Commissioner’s invitation to impose stricter

requirements.

To reflect the foregoing,

An appropriate order will be issued.

Reviewed by the Court.

KERRIGAN, FOLEY, GALE, GUSTAFSON, MORRISON,

BUCH, NEGA, PUGH, ASHFORD, URDA, COPELAND, JONES,

GREAVES, MARSHALL, and WEILER, JJ., agree with this opinion of

the Court.

PARIS, J., did not participate in the consideration of this opinion.

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