UNITED STATES TAX COURT

CZ

146 T.C. No. 6

UNITED STATES TAX COURT

WHISTLEBLOWER 22716-13W, Petitioner v.

COMMISSIONER OF INTERNAL REVENUE, Respondent

Docket No. 22716-13W.

Filed March 14, 2016.

P filed Form 211, Application for Award for Original Information, with the IRS Whistleblower Office with respect to TPl. By

guilty plea, TP1 agreed to pay an FBAR civil penalty substantially in

excess of $2,000,000 and a small amount of restitution, reflecting

unpaid Federal income tax on income derived from Swiss bank

accounts.

A whistleblower is eligible for a nondiscretionary award under

I.R.C. sec. 7623(b) only "if the tax, penalties, interest, additions to

tax, and additional amounts in dispute exceed $2,000,000." I.R.C.

sec. 7623(b)(5)(B). FBAR civil penalties are imposed and collected

under 31 U.S.C. sec. 5321 (2006), not under the Internal Revenue

Code. R contends that FBAR payments do not constitute "additional

amounts" for purposes of ascertaining whether the $2,000,000

threshold has been met.

1. Held: The term "additional amounts" as used in I.R.C. sec.

7623(b)(5)(B) means the civil penalties set forth in c. 68, subch. A, of

SERVED Mar 14 2016

-2the Internal Revenue Code, captioned "Additions to the Tax and

Additional Amounts."

2. Hel_d, further, FBAR civil penalties are not "additional

amounts" within the meaning of I.R.C. sec. 7623(b)(5)(B), and they

are not "assessed, collected, * * * [or] paid in the same manner as

taxes." I.R.C. sec. 6665(a)(1). FBAR payments must therefore be

excluded in determining whether the $2,000,000 "amount in dispute"

requirement has been satisfied.

Robert F. Katzburg and William M. Sharp, for petitioner.*

Ashley M. Bender and John T. Arthur, for respondent.

OPINION

LAUBER, Judge: This whistleblower award case is before the Court on a

motion for summary judgment filed by the Internal Revenue Service (IRS or respondent). A whistleblower is eligible for a nondiscretionary award under section

7623(b) only "if the tax, penalties, interest, additions to tax, and additional

amounts in dispute exceed $2,000,000." Sec. 7623(b)(5)(B).¹ The IRS collected

*Brief amicus curiae was filed by Dean Zerbe and Stephen M. Kohn as

attorneys for the National Whistleblowers Center.

¹All statutory references are to the Internal Revenue Code (Code or Title 26)

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

Practice and Procedure. All dollar amounts are rounded to the nearest dollar.

-3from the taxpayer who is the subject of this whistleblower claim a multi-milliondollar civil penalty for failing to file Form TD F 90-22.1, Report of Foreign Bank

and Financial Accounts (Foreign Bank Account Report or FBAR), under 31

U.S.C. sec. 5321(a) (2006). The question we must decide is whether this FBAR

payment constitutes an "additional amount" for purposes of ascertaining whether

the $2,000,000 threshold has been met. We hold that it does not. We will accordingly grant respondent's motion for summary judgment.

Background

Petitioner in 2010 filed Form 211, Application for Award for Original Information, with the IRS Whistleblower Office (Office).2 On the application he asserted that he was cooperating with the Department of Justice and the IRS Criminal

Investigation Division in connection with the ongoing investigation of two Swiss

bankers, Martin Lack and Renzo Gadola. Petitioner alleged that his cooperation

with those agencies had led to, and would lead to more, information about these

bankers' involvement in tax evasion by U.S. persons having undeclared offshore

2The Court granted petitioner's motion to proceed anonymously. In an effort to preserve petitioner's anonymity, the parties in their briefs and other filings

refer to the U.S. taxpayer who is the subject of the relevant whistleblower claim as

"Taxpayer 1." We will employ the same convention in this Opinion. When referring to Taxpayer 1 and to petitioner, we will employ the masculine pronoun and

possessive adjective without intending to create any implication concerning the

gender of either person.

-4financial accounts. The Office notified petitioner that it had received the Form

211 and had assigned unique claim numbers to his claims regarding the two

bankers.

On August 23, 2011, petitioner filed with the Office a third claim for an

award, which is the subject of the present controversy. Petitioner filed this claim

after learning that Taxpayer 1 had agreed to pay a substantial penalty in conjunction with a guilty plea for filing a false tax return. Taxpayer 1 admitted that

Gadola had helped him open Swiss bank accounts to conceal his income and assets from U.S. authorities. By the guilty plea, Taxpayer 1 agreed to pay an FBAR

civil penalty substantially in excess of $2,000,000 and a small amount of restitution, reflecting unpaid Federal income tax on income derived from the Swiss bank

accounts. Petitioner claimed entitlement to an award based upon the aggregate

amount paid by Taxpayer 1, given petitioner's alleged involvement in Gadola's

arrest, which allegedly led to Taxpayer 1's arrest.

During its review of the Taxpayer 1 claim, the Office informed petitioner

that it had received a legal opinion from the IRS Office of Chief Counsel concluding that FBAR penalty payments, because they are made pursuant to Title 31 rather than Title 26 of the U.S. Code, are not "collected proceeds" eligible for a nondiscretionary award under section 7623(b)(1). See Scope of Awards Payable

-5Under I.R.C. Section 7623, PMTA 2012-10. Viewing this as a de facto denial of

his Taxpayer 1 claim, petitioner sought immediate review in this Court. We granted respondent's motion to dismiss that case for lack ofjurisdiction, concluding

that the Office had not made, as of the time petitioner filed that petition, a "determination regarding an award" sufficient to confer jurisdiction on this Court. See

Whistleblower 22231-12W v. Commissioner, T.C. Memo. 2014-157.

On September 6, 2013, the Office issued petitioner a final determination letter informing him that his Taxpayer 1 claim had been denied. The letter stated two

grounds for the denial: (1) the Government had obtained complete information

about Taxpayer l 's offshore accounts directly from the Swiss bank, without any

assistance from petitioner; and (2) petitioner in any event could not qualify for a

nondiscretionary award because his claim did not meet the $2,000,000 threshold.

Believing that FBAR payments do not constitute "tax, penalties, interest, additions

to tax, * * * [or] additional amounts" within the meaning of section 7623(b)(5)(B),

the Office concluded that the amount in dispute with respect to the Taxpayer 1

claim, resolving all doubts in petitioner's favor, could not exceed $50,000.

Petitioner timely petitioned this Court for review of this determination denying his award. Respondent filed an answer raising the section 7623(b)(5)(B) dol-

-6lar threshold as an affirmative defense.3 On May 29, 2015, respondent moved for

summary judgment on the basis of petitioner's alleged failure to satisfy section

7623(b)(5)(B). The Court has received thorough briefing from the parties on this

subject, as well as a brief amicus curiae from the National Whistleblowers Center

(NWC), to which both parties have responded.

Discussion

I.

Standard of Review

The purpose of summary judgment is to expedite litigation and avoid un-

necessary and expensive trials. See FPL Grp., Inc. & Subs. v. Commissioner, 116

T.C. 73, 74 (2001). We may grant summary judgment when there is no genuine

dispute concerning any material fact and a decision may be rendered as a matter of

law. Rule 121(b); Elec. Arts, Inc. v. Commissioner, 118 T.C. 226, 238 (2002).

The parties agree on all questions of fact affecting the application of section

7623(b)(5)(B), and the proper interpretation of that provision presents a pure

3Respondent initially moved to dismiss this case for lack ofjurisdiction,

contending that the section 7623(b)(5)(B) "amount in dispute" requirement was

jurisdictional. This Court subsequently rejected that argument in Lippolis v.

Commissioner, 143 T.C. 393, 397 (2014), holding that section 7623(b)(5)(B)

affords the IRS only an affirmative defense. On April 6, 2015, respondent moved

to withdraw his motion to dismiss for lack ofjurisdiction, citing this Court's holding in Lippolis, and we granted that motion. Respondent filed his answer on April

6, 2015, raising as an affirmative defense that petitioner's claim does not satisfy

the $2,000,000 requirement.

-7question of law. We conclude that the question presented by respondent's motion

is appropriate for summary adjudication.4

II.

Governing Statutory Framework

A.

The Whistleblower Statute

The IRS has long had authority to pay awards to persons, now called "whistieblowers," who provide information leading to the recovery of unpaid taxes. The

Code now provides for two types of whistleblower awards: discretionary and nondiscretionary. The former derive from legislation enacted in 1867, which authorized the Secretary "to pay such sums * * * as may in his judgment be deemed

necessary for detecting and bringing to trial and punishment persons guilty of

violating the internal revenue laws, or conniving at the same." Act of Mar. 2,

1867, ch. 169, sec. 7, 14 Stat. at 473. This provision, reenacted without much

change as section 7623(a), authorizes the IRS to pay such sums as it "deems

necessary" and mandates that such payments "shall be paid from the proceeds of

4Respondent has not sought summary judgment on his alternative basis for

denying petitioner's claim, namely, that petitioner's information did not "substantially contribute to" the recovery from Taxpayer 1. See sec. 7623(b)(1); Whistleblower One 10683-13W, 145 T.C. __, __ (slip op. at 5) (Sept. 16, 2015) (noting

that whistleblowers are entitled to an award only if there was a collection of

proceeds "attributable in some way to the information that * * * [they] provided").

Because we rule for respondent under section 7623(b)(5)(B), we need not address

his alternative basis for denial, which appears to raise at least one dispute of

material fact.

-8amounts collected." The IRS' determinations with respect to these discretionary

awards are not subject to judicial review. See, e.g., DaCosta v. United States, 82

Fed. Cl. 549 (2008); Conner v. United States, 76 Fed. Cl. 86 (2007); Destefano v.

United States, 52 Fed. Cl. 291 (2002); see also Lippolis v. Commissioner, 143

T.C. 393, 399 (2014); Whistleblower 11332-13W v. Commissioner, 142 T.C. 396,

400 (2014).

The second type of whistleblower award, set forth in section 7623(b), was

introduced by the Tax Relief and Health Care Act of2006, Pub. L. No. 109-432,

sec. 406, 120 Stat. at 2958-2960. Section 7623(b) provides for nondiscretionary

(i.e., mandatory) awards if specified dollar thresholds and other requirements are

met. Under section 7623(b)(5), a whistleblower is eligible for a nondiscretionary

award with respect to any action-(A) against any taxpayer, but in the case of any individual, only

if such individual's gross income exceeds $200,000 for any taxable

year subject to such action, and

(B) if the tax, penalties, interest, additions to tax, and additional

amounts in dispute exceed $2,000,000.

If these monetary thresholds are met and the Government recovers "collected proceeds" attributable to the whistleblower's information, the whistleblower

will, subject to certain conditions, receive an award. This award will be "at least

-915 percent but not more than 30 percent of the collected proceeds (including penalties, interest, additions to tax, and additional amounts) resulting from the action

(including any related actions) or from any settlement in response to such action."

Sec. 7623(b)(1); see Cooper v. Commissioner, 136 T.C. 597, 600 (2011). If a

claim does not satisfy the dollar thresholds of section 7623(b)(5), the IRS retains

discretion to pay an award under subsection (a), but it is not required to pay an

award under subsection (b).

B.

FBAR Civil Penalties

Congress passed the Bank Secrecy Act (BSA), 31 U.S.C. secs. 5311-5332

(2006), to advance a variety of regulatory and investigative objectives, including

detection and prosecution of criminal activity and enforcement of laws under the

jurisdiction of the Department of the Treasury. See id. sec. 5311; United States v.

Simonelli, 614 F. Supp. 2d 241, 241 (D. Conn. 2008). The BSA requires (among

other things) that U.S. persons who have interests in (or authority over) bank or

financial accounts in foreign countries must report information about those

accounts to the Federal Government. An FBAR is the required vehicle for making

this disclosure. As relevant here, U.S. persons who hold one or more foreign

financial accounts with an aggregate value exceeding $10,000 must file an FBAR

- 10 with the Commissioner reporting the existence and value of the accounts. See 31

U.S.C. sec. 5314(a); 31 C.F.R. secs. 1010.350, 1010.306(c) (2011).

While "the obligation to file an FBAR arises under Title 31, individual taxpayers subject to the FBAR reporting requirements are alerted to this requirement

in the preparation of annual Federal income tax returns." Staff of J. Comm. on

Taxation, Technical Explanation of H.R. 4213, JCX-60-09, at 144 (Dec. 8, 2009).

The Form 1040, U.S. Individual Income Tax Return, currently includes at the

bottom of Schedule B, Interest and Ordinary Dividends, the following question:

"At any time during * * * [the taxable year] did you have a financial interest in or

signature authority over a financial account (such as a bank account, securities

account, or brokerage account) located in a foreign country?" A taxpayer who

checks the "yes" box is directed to instructions concerning his obligation "to file

* * * Report of Foreign Bank and Financial Accounts (FBAR), to report that

financial interest or signature authority."5

The BSA requires covered persons to file the FBAR with the Department of

the Treasury, but not to remit money or property. The FBAR form specifically in5During the period relevant to this case, individuals were required to make

FBAR reports on TD F 90-22.1, a Department of the Treasury form. On

September 30, 2013, the Department's Financial Crimes Enforcement Network

(FinCEN) announced that FBAR reports would thenceforth be made on FinCEN

Report 114. Form 1040, Schedule B, now refers taxpayers to the latter form.

- 11 structs filers: "Do NOT file with your Federal Tax Return." As relevant here, the

BSA imposes no pecuniary burden on covered persons, only the requirement that

they file an FBAR.

A person who fails to file a required FBAR may be assessed a civil

monetary penalty. 31 U.S.C. sec. 5321(a)(5)(A). The amount of the penalty is

capped at $10,000 unless the failure was willful. See 4 subparas. (B)(i), (C). If

the failure was willful, the maximum penalty increases to $100,000 or half the

value of the foreign bank account at the time of the violation, whichever is greater.

I_b4 In either case, whether to impose the penalty and the amount of the penalty

are committed to the discretion of the Secretary. M 4 subpara. (A) ("The

Secretary of the Treasury may impose a civil money penalty[.]"); 4 subpara. (B)

("the amount of any civil penalty * * * shall not exceed" the statutory ceiling).

The FBAR civil penalty may be assessed "at any time before the end of the

six-year period beginning on the date of the transaction with respect to which the

penalty is assessed." 31 U.S.C. sec. 5321(b)(1). The Government may commence

a civil action to recover an assessed FBAR penalty at any time before the end of

the two-year period beginning on the later of (a) the date the penalty was assessed

or (b) the date any judgment becomes final in a related criminal action. See id.

para. (2); United States v. Williams, 489 F. App'x 655 (4th Cir. 2012); Moore v.

- 12 United States, 2015 WL 1510007 (W.D. Wash. Apr. 1, 2015); United States v.

McBride, 908 F. Supp. 2d 1186 (D. Utah 2012).

Authority to enforce BSA requirements, including imposition of FBAR civil

penalties, was initially delegated to the Financial Crimes Enforcement Network

(FinCEN), a bureau of the Department of the Treasury. FinCEN's overall mission

is to collect and analyze information about financial transactions in order to

combat money laundering, terrorist financing, and other financial crimes. See 31

U.S.C. sec. 5311; Simonelli, 614 F. Supp. 2d at 241. Through a memorandum of

agreement between FinCEN and the IRS, authority to administer the FBAR regime

has been redelegated to the Commissioner. See 31 C.F.R. sec. 1010.810(g)

(2011). The Secretary recommended this redelegation in part because "the FBAR

is directed more towards tax evasion, as opposed to money laundering or other

financial crimes, that lie at the core mission of FinCEN." FinCEN, Report to

Congress in Accordance with Section 361(b) of the USA PATRIOT Act, at 4

(Apr. 24, 2003).

The authority thus delegated to the Commissioner is broad, giving the IRS

the power to assess and collect civil penalties for noncompliance with FBAR requirements, investigate possible violations, employ summons power, issue administrative rulings, and take "any other action reasonably necessary" to implement

- 13 and enforce the FBAR regime. 31 C.F.R. sec. 1010.810(g); see also FinCEN,

Report to Congress in Accordance with Section 361(b) of the USA PATRIOT Act,

at 5 (Apr. 8, 2005) (delegation allows IRS "to create interpretive education outreach materials for the FBAR, revise the form and instructions, examine individuals and other entities, and assess civil penalties for violations").

III.

Analysis

A.

"Additional Amounts"

Section 7623(b)(5) makes a whistleblower eligible for a nondiscretionary

award only if his claim satisfies two monetary thresholds. The parties appear to

agree that Taxpayer l 's gross income exceeded $200,000. See sec. 7623(b)(5)(A).

In order to prevail, therefore, petitioner must show that "the tax, penalties, interest,

additions to tax, and additional amounts in dispute exceed $2,000,000" with respect to his Taxpayer 1 claim. See sec. 7623(b)(5)(B). Petitioner does not

contend that FBAR payments constitute "tax," "interest," or "additions to tax," nor

does he contend that they are "penalties" under the Internal Revenue Code. The

focus of the parties' dispute, and the question we must decide, is whether FBAR

- 14 payments constitute "additional amounts" within the meaning of section

7623(b)(5)(B).6

In deciding the proper interpretation of "additional amounts" as used in this

section, the starting point is the language of the statute. Greyhound Corp. v. Mt.

Hood Stages, Inc., 437 U.S. 322, 330 (1978). Where Congress uses a term of art

that has acquired an established meaning over a long period, Congress presumably

intends that meaning when it uses that term. See, e.g., Morissette v. United States,

342 U.S. 246, 263 (1952); cf Direct Mktg. Ass'n v. Brohl, 571 U.S. __, __, 135 S.

Ct. 1124, 1129-1130 (2015) (applying this principle to define for tax purposes the

terms "assessment," "levy," and "collection"); 1836 S St. Tenants Ass'n, Inc. v.

Estate of B. Battle, 965 A.2d 832, 839 (D.C. 2009) ("When a legislature borrows

common law terms of art in writing legislation, 'it presumably knows and adopts

6Respondent also advances the broader contention that whistleblower

awards are payable only for recoveries under "the internal revenue laws." h sec.

7623(a)(2). Because FBAR penalties are paid under Title 31, respondent argues

that they are not "collected proceeds" under section 7623(b)(1). Since we rule for

respondent under the affirmative defense in section 7623(b)(5)(B), we need not

address this alternative contention. We note that the IRS Chief Counsel opinion

issued during the consideration of petitioner's case acknowledges one type of

payment made outside of Title 26 that does constitute "collected proceeds." That

opinion notes that "[t]he IRS assesses and collects in the same manner as tax any

criminal restitution ordered" in a criminal case, and that "any such restitution

should be included as 'collected proceeds' for purposes of section 7623, even

though ordered pursuant to Title 18." See supra p. 4.

- 15 the cluster of ideas that were attached to [the] borrowed word[s].'" (alteration in

original) (quoting 1618 Twenty-First St. Tenants' Ass'n v. The Phillips

Collection, 829 A.2d 201, 203 (D.C. 2003)). Where the same word or phrase

appears multiple times within a statutory text, it is generally presumed to have the

same meaning each place it appears. See, e.g., Atl. Cleaners & Dyers, Inc. v. Uni-

ted States, 286 U.S. 427, 433 (1932) ("Undoubtedly, there is a natural presumption

that identical words used in different parts of the same act are intended to have the

same meaning."); Rand v. Commissioner, 141 T.C. 376, 385 (2013) (same).

The term "additional amounts," when used in a series that also includes the

words "tax" and either "additions to tax" or "additions to the tax," appears nearly

40 times in the Internal Revenue Code.7 Elsewhere in the U.S. Code, the term

"additional amount" appears in a series of this sort only twice; in both instances,

the provision in which it appears is captioned "Taxes." See 22 U.S.C. sec.

1631k(d)(2006)(defining "tax[es]" to include specified taxes "and also any

interest, penalty, additional amount, or addition thereto"); 50 U.S.C. sec. 4333

(2006) (same).

7Such appearances include sections, 692(a)(2), 860, 3121(1)(1)(A), 4961(a),

6155(a), 6159(c)(1), 6201(a), 6202, 6214, 6221, 6226, 6229, 6230, 6242, 6247(c),

6321, 6324A(a), 6404, 6423(d)(2), 6503(f)(2)(B), 6601(e)(2), 6602, 6665, 6751,

6851(a)(1), 6852(a)(1)(B), 6861(a), 6862, 6871, 6902(b), 7122, 7463(e), 7485,

7491, 7508, 7508A, and 7522(a).

- 16 "Additional amounts" and "additions to the tax" are terms of art in the Internal Revenue Code. Chapter 68 of the Code is captioned "Additions to the Tax,

Additional Amounts, and Assessable Penalties." Subchapter A of chapter 68 is

captioned "Additions to the Tax and Additional Amounts." This subchapter

includes 13 sections, including the additions to tax for failure timely to file a

return or timely pay tax, the accuracy-related penalty under section 6662, and the

fraud penalty under section 6663. Section 6665, the last section in this subchapter,

is captioned "Applicable Rules." It states that, except as otherwise provided in

Title 26, "the additions to the tax, additional amounts, and penalties provided by

this chapter shall be * * * assessed, collected, and paid in the same manner as

taxes" and that "any reference in this title to 'tax' imposed by this title shall be

deemed also to refer to the additions to the tax, additional amounts, and penalties

provided by this chapter."

Given this statutory structure, we have repeatedly held that the term "additional amounts" has a technical meaning in the Code, referring specifically to penalties set forth in chapter 68, subchapter A. For example, in Bregin v. Commis-

sioner, 74 T.C. 1097, 1101 (1980), we had to determine whether we had jurisdiction in a deficiency case to consider an IRS claim for an erroneous refund.

Under section 6214(a), this Court has jurisdiction "to redetermine the correct

- 17 amount of the deficiency even if the amount so redetermined is greater than the

amount of the deficiency * * * and to determine whether any additional amount, or

any addition to the tax should be assessed, if claim therefor is asserted by the

Secretary at or before the hearing." The IRS urged that the term "additional

amount" be construed broadly enough to include the erroneous refund it sought to

recover from the taxpayer.

We disagreed. We noted that "[t]he term 'additional amount' appears in

chapter 68 of the Internal Revenue Code of 1954, which relates to 'Additions to

the Tax, Additional Amounts, and Assessable Penalties.'" 74 T.C. at 1102-1103.

We concluded that the term "additional amounts" as used in chapter 68 means one

of the civil penalties referred to in that chapter and "that the same meaning was

intended in section 6214(a), especially since it refers to both additional amounts

and additions to the tax." Id. at 1103. Our review of the legislative history

confirmed that the term "additional amounts" as used in section 6214(a) was

"intended only to refer to claims for the civil penalties." Ibid.

In Pen Coal Corp. v. Commissioner, 107 T.C. 249 (1996), we had to decide

whether we had jurisdiction to redetermine a corporate taxpayer's liability for

interest computed at the increased rate prescribed by section 6621(c). The

taxpayer contended that section 6214(a) gave the Court jurisdiction on the theory

- 18 that "such interest constitutes an 'additional amount' within the meaning of

section 6214(a)." R at 255-256. Relying on our analysis in Bregin we rejected

this argument, concluding: "Congress used the phrase 'any additional amount, or

any addition to the tax' in section 6214(a) to ensure an understanding that this

Court's jurisdiction encompasses items that are to be assessed, collected, and paid

in the same manner as taxes, including the additions to tax and other additional

amounts * * * described in chapter 68." R at 258; c[ El v. Commissioner, 144

T.C. 140, 148 (2015) (holding that the "additional tax" imposed by section

72(t)(1) is not a "penalty, addition to tax, or additional amount" within the

meaning of section 7491(c)).

In Williams v. Commissioner, 131 T.C. 54 (2008), we ruled that FBAR penalties do not constitute "additional amounts" for purposes of our deficiency or

CDP jurisdiction. The taxpayer there sought redetermination of tax deficiencies

for certain years and also asked us to "abate" FBAR penalties allegedly imposed

for his failure to disclose Swiss bank accounts. Id. at 55. We held that we lacked

jurisdiction over the FBAR penalties, noting that they "are authorized in Title 31

('Money and Finance') of the United States Code, not Title 26 (the Internal Revenue Code)." R at 56. The taxpayer "d[id] not point to any grant ofjurisdiction to

this Court that would extend to FBAR penalties," and we found none. E at 57.

- 19 We noted that the term "tax" is defined for purposes of our CDP jurisdiction "to

include 'additions to the tax, additional amounts, and penalties provided by'"

chapter 68. Id. at 59 n.6 (quoting section 6665(a)(2)). But "we * * * [were] aware

of no statute that would expand 'tax' as used in the lien and levy statutes in Title

26 to include the FBAR penalty of Title 31." Ibid.

As these cases show, we have consistently held that "additional amounts,"

particularly when it appears in a series that also includes "tax" and "additions to

tax," is a term of art that refers exclusively to the civil penalties enumerated in

chapter 68, subchapter A. "Additional amounts" appears in section 7623(b)(5)(B)

in conjunction with "tax" and "additions to tax," and we find no reason to give

that term a different meaning in this section than it has elsewhere. In Williams, we

ruled that an FBAR civil penalty is not an "additional amount" for purposes of our

deficiency or CDP jurisdiction. Petitioner has supplied no textual basis, either in

the language of the statute or the structure of the Code, for reaching a different

conclusion with respect to the whistleblower provision at issue here.

FBAR civil penalties are not among the tax-related penalties enumerated in

chapter 68, and they are not "assessed, collected, and paid in the same manner as

taxes." Sec. 6665(a)(1); see Moore, 2015 WL 1510007, at *8 ("In contrast to

well-worn procedures for assessing tax deficiencies, a person searching the Code

- 20 of Federal Regulations or United States Code for information on the procedure for

FBAR penalty assessment will come up nearly empty-handed."). FBAR penalties

are not "additional amounts" within the meaning of section 7623(b)(5)(B), and

they must be excluded in determining whether the $2,000,000 "amount in dispute"

requirement has been satisfied.8

B.

Petitioner's Contentions

1.

"Structural" Arguments

Petitioner and amicus curiae NWC argue that the term "additional amounts"

as used in section 7623(b)(5)(B) means, in essence, "other sums of money." But

they point to no other Code section in which "additional amounts" has this broad

and virtually limitless meaning. And they offer no convincing rebuttal to the canons of construction dictating that terms of art be given a consistent meaning in a

8Section 7623(b)(1) provides for nondiscretionary awards if the Secretary

proceeds with an "action described in subsection (a)," and subsection (a) authorizes payment only "where such expenses are not otherwise provided for by law."

Noting that 31 U.S.C. sec. 5323(a) authorizes the Secretary to pay rewards to

persons who provide information leading to recovery of FBAR penalties, respondent urges that FBAR informant awards are "otherwise provided for by law."

Petitioner disagrees, noting that rewards under 31 U.S.C. sec. 5323(a) are discretionary whereas rewards under section 7623(b)(1) would be mandatory. Because

we rule for respondent under section 7623(b)(5), we need not address this alternative theory. Respondent also contends that FBAR recoveries, because deposited

into the Department of the Treasury's General Fund, are not "available for"

whistleblower awards. See sec. 7623(a). We need not address this argument

either.

- 21 statutory text and that a technical word or phrase is presumed to have the same

meaning each place it appears. Rather than focus on the subparagraph at issue, petitioner and NWC emphasize language appearing elsewhere in the statute, urging

that these broader meanings be imported into section 7623(b)(5)(B). But they provide no textual support for doing this, only vague appeals to the statute's "overall

structure."

Petitioner and NWC note that section 7623(a) authorizes the Secretary to

pay such sums as he deems necessary, from the "proceeds of amounts collected,"

to detect persons guilty of violating the tax laws "or conniving at the same."

FBAR civil penalties, they urge, are reasonably embraced within "proceeds of

amounts collected" from persons "conniving at" such violations. Indeed, the

record in this case indicates that the Office, prior to 2009, did pay discretionary

awards under section 7623(a) based on FBAR recoveries, and nothing in this

Opinion would prevent the Secretary from doing so in the future. The question at

hand is whether petitioner is eligible for a nondiscretionary award under section

7623(b), and that depends on whether "the tax, penalties, interest, additions to tax,

and additional amounts in dispute exceed $2,000,000." The broader language of

section 7623(a) provides no justification for giving the term "additional amounts"

in section 7623(b)(5)(B) a meaning that it has nowhere else in the Code.

- 22 Petitioner next observes that section 7623(b)(1) computes nondiscretionary

awards as a percentage of "the collected proceeds (including penalties, interest,

additions to tax, and additional amounts) resulting from the action." Congress'

use of the word "including" shows that the ensuing list (which notably omits the

word "tax") is not exhaustive. See sec. 7701(c); Dunaway v. Commissioner, 124

T.C. 80, 91-92 (2005). And the Supreme Court observed long ago that the word

"proceeds" is "of great generality." Phelps v. Harris, 101 U.S. (11 Otto) 370, 380

(1879). Petitioner urges that the term "collected proceeds" is broad enough to include FBAR penalties collected by the IRS, even though they are paid under Title

31 and even if they do not constitute tax, penalties, interest, additions to tax, or

additional amounts under Title 26.

While this argument is not without force, we do not see how it affects the

proper textual analysis of section 7623(b)(5)(B). Congress could have employed,

but did not employ, the term "collected proceeds" when drafting the $2,000,000

monetary threshold. And it did not use the word "including." Instead, Congress

explicitly and unambiguously provided that a whistleblower is eligible for a nondiscretionary award only "if the tax, penalties, interest, additions to tax, and additional amounts in dispute" exceed $2,000,000.

- 23 "[W]hen the legislature uses certain language in one part of the statute and

different language in another, the court assumes different meanings were intend-

ed." Sosa v. Alvarez-Machain, 542 U.S. 692, 711 n.9 (2004) (quoting 2A N.

Singer, Statutes and Statutory Construction, sec. 46:06, at 194 (6th rev. ed. 2000)).

We have no occasion in this case to decide whether "collected proceeds" as used

in section 7623(b)(1) is broad enough to include civil penalties paid for violation

of Title 31. See supra note 6. Even if that question were answered in the

affirmative, petitioner could not qualify for a nondiscretionary award computed on

that broader base unless he first satisfied the section 7623(b)(5)(B) monetary

threshold. He cannot do this because FBAR civil penalties do not constitute

"additional amounts" within the meaning of that section.

As petitioner notes, courts may rely on a statute's structure as an aid to

interpreting its specific terms. See generally Abramski v. United States, 573 U.S.

, __, 134 S. Ct. 2259, 2267 (2014). But reliance on context and structure in

statutory interpretation is a "subtle business, calling for great wariness lest what

professes to be mere rendering becomes creation and attempted interpretation of

legislation becomes legislation itself." Palmer v. Massachusetts, 308 U.S. 79, 83

(1939); Yari v. Commissioner, 143 T.C. 157, 165 n.5 (2014) ("[T]he process of

divining the legislative intent underlying a statute's * * * structure, while subject

- 24 to canons of construction and well-established methodologies, is hardly an exact

science."). In the absence of specific statutory language linking the potentially

broader terms of subsections (a) and (b)(1) to the affirmative defense of subsection

(b)(5)(B), we are not at liberty to give "additional amounts"--a term of art with a

long-established meaning--a meaning that it has nowhere else in the Internal

Revenue Code.°

2.

Policy Arguments

Because FBAR civil penalties are "administered by the IRS, are reported

alongside income tax returns, and have a tax-related purpose," petitioner contends

that "they are, in effect, 'internal revenue laws,' and should be treated as such

when construing Section 7623's scope." Given the IRS' important role in FBAR

administration, at least one court has found that the Internal Revenue Code and the

FBAR provisions of Title 31 are "related statutes." Hom v. United States, 2013

WL 5442960 (N.D. Cal. Sept. 30, 2013). According to petitioner, IRS closing

agreements settling offshore voluntary disclosure cases have provided that, "in

°Congress did create links between other parts of section 7623. For example, Congress explicitly linked subsection (b)(1) to subsection (a), mandating an

award "[i]f the Secretary proceeds with any administrative or judicial action

described in subsection (a)." Congress clearly knows how to create such links

when it intends to do so. For whatever reason, it did not create links of the sort

petitioner desires between subsection (b)(5) and the rest of the statute.

- 25 lieu of" an FBAR penalty, the IRS "may assess under Title 26 of the United States

Code a miscellaneous penalty" in an agreed-upon amount. Given the close

connections between the FBAR regime and tax enforcement, petitioner and NWC

urge that treating FBAR penalties the same as taxes is a sensible policy.

The failure to treat FBAR penalties as taxes, petitioner continues, could

undercut the effectiveness of the whistleblower law. At a time when undisclosed

offshore accounts constitute a major form of tax evasion, FBAR penalties, which

can range as high as 50% of the offshore account balance annually, may often

dwarf the income tax liabilities generated by the earnings from that account. If

FBAR penalties do not count toward the $2,000,000 monetary threshold, whistleblowers will allegedly have little incentive to blow the whistle on these schemes,

frustrating Congress' intent in enacting this law.

Petitioner notes that the IRS and the Department of Justice have great discretion in negotiating settlements and plea agreements. If a case involving undisclosed offshore accounts also involves large potential income tax liabilities, the

Government may elect to compromise the latter, effectively directing most of the

proceeds into the FBAR penalty bucket. If FBAR proceeds do not count toward

the $2,000,000 monetary threshold, petitioner fears that the Government could

- 26 unilaterally make deserving whistleblowers ineligible for section 7623(b) awards

by the manner in which it settles cases.¹°

To the extent these concerns have force, they are directed to the wrong

forum. There are indisputably strong practical connections between the FBAR

regime and tax enforcement; that is presumably what persuaded the Secretary to

redelegate FBAR administrative authority to the IRS. But our task is to decide

whether FBAR penalties constitute "tax, penalties, interest, additions to tax, * * *

[or] additional amounts" within the meaning of section 7623(b)(5)(B).

Departmental delegation orders and the practical issues petitioner raises shed no

meaningful light on the proper interpretation of this text. The IRS has broad

discretion in deciding whether to pursue a taxpayer identified by a whistleblower

and in determining how such cases shall be resolved. We lack jurisdiction to

address these matters. Cohen v. Commissioner, 139 T.C. 299, 302 (2012), af[d,

550 F. App'x 10 (D.C. Cir. 2014); see Lichtman v. United States, 316 F. App'x

¹°As noted earlier, petitioner contends that the IRS often settles offshore

voluntary disclosure cases by requiring the taxpayer, in lieu of paying an FBAR

penalty, to pay "under Title 26 of the United States Code a miscellaneous penalty"

in an agreed-upon amount. See supra p. 24; see also Offshore Voluntary

Disclosure Program Frequently Asked Questions and Answers 2014, Q&A 7. If

the penalties thus paid constitute "penalties" within the meaning of section

7623(b)(5)(B)--a point the parties have not addressed because Taxpayer 1 did not

settle his case under those procedures--this manner of settling cases, far from

hurting whistleblowers, would seem to help them.

- 27 116, 119 (3d Cir. 2008) ("[T]he IRS's decision to investigate or not investigate a

particular taxpayer's case is within its discretion.").

Petitioner and NWC may well be right that the statute would offer stronger

incentives to whistleblowers if FBAR civil penalties were treated like tax

liabilities for purposes of determining eligibility for nondiscretionary awards

under section 7623(b)(5)(B). And in that event the whistleblower law might more

effectively advance the objectives that Congress envisioned for it. But if this is a

gap in the statute, it is a gap that only Congress, and not this Court, can fill.

To reflect the foregoing,

An appropriate order and decision

will be entered for respondent.