Michael Lissack v. Commissioner of Internal Revenue

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Filed January 10, 2025
No. 21-1268
M ICHAEL LISSACK,
APPELLANT
v.
C OMMISSIONER OF INTERNAL R EVENUE,
APPELLEE
On Remand from the Supreme Court of the United States
Erica L. Brady-Gitlin argued the cause for appellant. With
her on the briefs were Gregory S. Lynam and Scott A. Knott.
Brian C. Wille and Usman Mohammad were on the brief
for amicus curiae Whistleblower 1109-13W in support of
appellant.
Dean Zerbe and Stephen M. Kohn were on the brief for
amicus curiae National Whistleblower Center in support of
appellant.
Julie Ciamporcero Avetta, Attorney, U.S. Department of
Justice, argued the cause for appellee. With her on the brief
was Bruce R. Ellisen, Attorney.

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Before: P ILLARD and KATSAS , Circuit Judges, and
R ANDOLPH , Senior Circuit Judge.
Opinion for the Court filed by Circuit Judge P ILLARD.
P ILLARD, Circuit Judge: Section 7623 of the Internal
Revenue Code authorizes the IRS to pay awards to
whistleblowers who identify underpayment of taxes or
violations of internal revenue law. The provision at issue here,
subsection 7623(b)(1), mandates awards for whistleblowers
who provide the IRS with information that makes a substantial
contribution to a tax adjustment. It calls for awards of between
15 and 30 percent of proceeds the IRS collects “as a result of”
an “administrative or judicial action” that is “based on
information” provided by a whistleblower. I.R.C.
§ 7623(b)(1). The IRS’s “determination of the amount of such
award” depends on the extent to which a whistleblower
“substantially contributed” to the administrative action. Id. A
Treasury regulation implementing the statute allows the IRS to
treat investigations into unrelated tax issues of the same
taxpayers as separate “administrative action[s].” 26 C.F.R.
§§ 301.7623-2(a)(2), (b)(2) (Example 2). Appellant Michael
Lissack claimed that the IRS owed him a whistleblower award
under subsection 7623(b)(1), and he argued that the Treasury
regulation on which the IRS relied to decide otherwise
contravenes the text of the statute.
Lissack submitted information to the IRS that he thought
showed that a condominium development group evaded taxes
through its treatment of golf-club-membership deposits. The
IRS deemed the information Lissack submitted sufficiently
specific and credible to warrant opening an examination, but
later concluded that the membership deposits were correctly
reported. Through its own further investigation, however, the
IRS discovered an unrelated problem: The same development

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group had taken an impermissible deduction on intercompany
bad debt. The IRS eventually ordered the development group
to pay a large adjustment relating to its treatment of that debt,
but it denied Lissack’s claim for a percentage of those
proceeds. When Lissack sought review of that decision, the
Tax Court granted summary judgment to the IRS. Lissack v.
Comm’r, 157 T.C. 63, 78 (2021). Lissack appealed to us, and
the IRS primarily argued that the Tax Court lacked jurisdiction
to review its award denial, even as it defended its rule and its
application to Lissack’s case.
In an opinion issued in 2023, we held that the Tax Court
had jurisdiction, the Whistleblower Definitions Rule was a
reasonable interpretation of the statute under Chevron, U.S.A.,
Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837
(1984), and the Tax Court correctly decided summary
judgment on a sufficient administrative record that Lissack
never sought to supplement. Lissack v. Comm’r, 68 F.4th 1312
(D.C. Cir. 2023).
Lissack sought Supreme Court review. Petition for Writ
of Certiorari, Lissack v. Comm’r, 144 S. Ct. 2707 (2024) (No.
23-413). In the interim, the Court decided Loper Bright
Enterprises v. Raimondo, 144 S. Ct. 2244 (2024), in which it
held that “Chevron is overruled.” Id. at 2273. Courts must now
“exercise their independent judgment in deciding whether an
agency has acted within its statutory authority.” Id. The Court
then granted Lissack’s petition, vacated our judgment, and
remanded the case for further consideration in light of Loper
Bright. Lissack v. Comm’r, 144 S. Ct. 2707 (2024). We now
reconsider Lissack’s appeal in accordance with that mandate.
Reviewing the challenged rules without deference, we
conclude that the Service correctly interpreted and applied the
Whistleblower Definitions Rule, so we again affirm the
decision of the Tax Court.

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BACKGROUND
A.
The Internal Revenue Service (IRS or Service) has
authority under Internal Revenue Code Section 7623 to pay
awards to whistleblowers who help the Service identify and
collect underpaid taxes. Congress first granted that authority
to the Secretary of the Treasury in 1867. Act of March 2, 1867,
Pub. L. No. 39-169, § 7, 14 Stat. 471, 473. Until 2006, any
such whistleblower award was at the discretion of the IRS. See
Taxpayer Bill of Rights 2, Pub. L. 104-168, § 1209, 110 Stat.
1452, 1473 (1996); Whistleblower 14106-10W v. Comm’r, 137
T.C. 183, 186 (2011). Under the discretionary regime, the
Service was not bound by the statute or regulations to pay any
whistleblower and, when it chose to do so, the amount was
within its sole discretion; there was no provision for judicial
review.
In 2006, Congress amended the tax whistleblower statute.
Tax Relief and Health Care Act of 2006, Pub. L. No. 109-432,
§ 406, 120 Stat. 2922, 2958-60 (2006 Act). Even as it retained
in subsection (a) the IRS’s longstanding authority to make
discretionary awards to people who help in “detecting
underpayments of tax” or “detecting and bringing to trial and
punishment” persons who violate internal revenue laws, I.R.C.
§ 7623(a), the amendment added subsection (b) to make some
whistleblower awards mandatory. See Tax Relief and Health
Care Act § 406; I.R.C. § 7623(b). The 2006 Act also created
the IRS Whistleblower Office, empowered it to determine
award amounts, and authorized appeal to the Tax Court of any
“determination” regarding a mandatory Whistleblower Office
award. § 406, 120 Stat. at 2958-60; I.R.C. § 7623(b)(4). This
appeal turns on the meaning of the mandatory-award provision

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(subsection (b)(1)) and the judicial-review provision
(subsection (b)(4)).
Under the mandatory-award provision, a whistleblower
“shall . . . receive” an award if the IRS “proceeds with any
administrative or judicial action described in subsection (a)”—
i.e., detecting underpayments or detecting and bringing evaders
to judgment—“based on information brought to the Secretary’s
attention by” the whistleblower. I.R.C. § 7623(b)(1). (For
convenience in this appeal, which involves only administrative
action against a taxpayer, we use the shorthand “administrative
action” rather than “administrative . . . action,” and “proceeds
based on,” rather than “proceeds . . . based on,” when quoting
subsection 7623(b)(1).) A mandatory award under subsection
(b)(1) must be 15 to 30 percent “of the proceeds collected as a
result of the action (including any related actions),” or due to a
settlement. Id. Within that range, the amount of a mandatory
award “shall depend upon the extent to which the individual
substantially contributed to such action.” Id.
The judicial-review provision states: “Any determination
regarding an award under paragraph [(b)](1) . . . may, within
30 days of such determination, be appealed to the Tax Court
(and the Tax Court shall have jurisdiction with respect to such
matter).” Id. § 7623(b)(4). We recently held that a reviewable
“determination regarding an award” within the meaning of that
paragraph, id., does not include the Whistleblower Office’s
“threshold rejection” of a whistleblower’s submission “for
vague and speculative information” in advance of any referral
to the IRS for examination, Li v. Comm’r, 22 F.4th 1014, 1017
(D.C. Cir. 2022). In this appeal, the IRS argues that the Tax
Court lacked jurisdiction because, in its view, the logic of Li
means the Whistleblower Office’s final determination letter
denying Lissack’s claim was not a reviewable determination
under subsection (b)(4).

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B.
Lissack challenges three parts of a Treasury Department
regulation we refer to as the Whistleblower Definitions Rule:
(1) the definition of “administrative action,” (2) one of the
examples illustrating what counts as the Service
“proceed[ing]” with an administrative action “based on”
whistleblower information, and (3) the definition of “related
action.” 26 C.F.R. §§ 301.7623-2(a)(2), (b)(2) (Example 2),
(c)(1). The IRS is a component of the Treasury Department;
for ease of reference in this opinion we attribute the rule to the
IRS.
First, as to “administrative action,” recall that an award is
mandatory under the statute if the IRS “proceeds with any
administrative or judicial action” that is “based on” the
whistleblower’s information. I.R.C. § 7623(b)(1). The Rule
defines “administrative action” to mean “all or a portion of an
Internal Revenue Service (IRS) civil or criminal proceeding
against any person that may result in collected
proceeds, . . . including, for example, an examination, a
collection proceeding, a status determination proceeding, or a
criminal investigation.” 26 C.F.R. § 301.7623-2(a)(2)
(emphasis added). That definition allows the IRS to divide
examinations into discrete portions or segments raising distinct
tax issues, and to treat each as a separate administrative action
for purposes of attributing an action to whistleblower
information.
Next, in defining how the Service “proceeds” with an
action “based on” whistleblower information, I.R.C.
§ 7623(b)(1), the Rule distinguishes IRS administrative actions
subject to the mandatory-award provision from those not
triggering such an award: The IRS “proceeds based on
information provided by a whistleblower when the information

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provided substantially contributes to an action against a person
identified by the whistleblower.” 26 C.F.R. § 301.7623-
2(b)(1). For example, when the IRS “initiates a new action,
expands the scope of an ongoing action, or continues to pursue
an ongoing action, that the IRS would not have initiated,
expanded the scope of, or continued to pursue, but for the
information provided,” it “proceeds based on” the
whistleblower submission. Id.
The regulatory definitions of “administrative action” and
“proceeds based on” work together. They help explain that the
IRS may consider investigations into tax issues unrelated to the
whistleblower submission as separate administrative actions.
The upshot is that a whistleblower whose information may
have “substantially contributed” to a fruitless action against a
person is not entitled to share proceeds from a distinct action
against that same person that did not draw on the
whistleblower’s information. As the agency explained in the
preamble to the final regulations, “the tax administration
process is a long and multi-faceted one that may extend over
the course of many years and may involve multiple substantial
contributions from different sources.” Awards for Information
Relating to Detecting Underpayments of Tax or Violations of
the Internal Revenue Laws, 79 Fed. Reg. 47,246, 47,262/3
(Aug. 12, 2014) (codified at 26 C.F.R. pt. 301). In cases
involving multiple tax issues, treating each distinct tax issue as
a separate “administrative action” enables the IRS to calibrate
whether and to what extent a recovery was “based on” a
whistleblower’s tip “by reference to just the discrete and
relevant portion of the examination to which the information
provided relates.” Id. at 47,250/3.
The Whistleblower Definitions Rule includes some
examples illustrating rule applications. The challenged
Example Two to the definition of “proceeds based on”

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describes cases in which the IRS’s investigation of a
whistleblower submission uncovers “additional facts that are
unrelated to the activities described in the information provided
by the whistleblower,” leading the Service to examine issues
other than those the whistleblower identified. 26 C.F.R.
§ 301.7623-2(b)(2) (Example 2). In those circumstances, the
Rule explains, “[t]he portions of the IRS’s
examination . . . relating to the additional facts obtained”
through the Service’s independent investigative measures “are
not actions with which the IRS proceeds based on the
information provided by the whistleblower because the
information provided did not substantially contribute to the
action.” Id. (emphasis added).
The third target of Lissack’s challenge is the
Whistleblower Definitions Rule’s interpretation of the
statutory term “related actions.” I.R.C. § 7623(b)(1). Recall
that the mandatory-award provision of the statute directs that a
whistleblower shall receive a percentage of “the proceeds
collected as a result of the action (including any related
actions).” Id. (emphasis added). Under the Whistleblower
Definitions Rule, “the term related action means an action
against a person other than the person(s) identified in the
information provided and subject to the original action(s),” so
long as the action against the additional person has a
regulatorily specified nexus to the original action. 26 C.F.R.
§ 301.7623-2(c)(1). That definition does not treat the IRS’s
action on a distinct issue against the same person as “related”
to its action on the whistleblower’s information, even if the IRS
only discovered the distinct issue because the whistleblower
led it to audit that person.

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C.
In 2009, Michael Lissack filed with the IRS Whistleblower
Office an Application for Award for Original Information
(Form 211). He submitted almost 200 pages of material
identifying a condominium development group and showing
why he thought it had underpaid its taxes on golf club
memberships. Lissack contended that, after making
membership deposits nonrefundable in 2008, the development
group should have reported the retained deposits to the IRS as
gross income.
Lissack’s information led to an IRS examination into the
development group. A senior tax analyst in the Whistleblower
Office determined that Lissack’s submission identified a tax
issue and referred it to the IRS Large Business and
International Division. A revenue agent in that division opened
an investigation based on Lissack’s information and sent
progress reports to the Whistleblower Office.
In a 2011 report, the revenue agent explained that, before
receiving Lissack’s submission, the IRS had not planned to
investigate the development group, but the information Lissack
provided “was sufficient to warrant beginning of examination.”
Lissack v. Comm’r, 157 T.C. 63, 66 (2021). In other words,
the revenue agent acknowledged that Lissack’s submission was
the reason the IRS opened an examination. The following
month, the revenue agent reported that he had fully researched
the membership-deposit tax issue and concluded that the
development group reported the deposits correctly.
Even as he reported that he was closing the book on the
membership-deposit issue Lissack had raised, the revenue
agent noted that his investigation had uncovered a different tax
issue that was “unrelated to the subject of the whistleblower
claims.” Id. He saw indications that the development group

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had taken a $60 million deduction for “bad debt,” meaning a
business debt that the company characterized as worthless and
deducted from gross income. Id.; Topic No. 453, Bad Debt
Deduction, IRS, https://perma.cc/VN67-LGGF (last updated
Apr. 6, 2023). The revenue agent accordingly expanded the
audit based on the facts he had discovered.
In 2013, the revenue agent finished the examination and
ordered several tax adjustments, the largest of which was for
the $60 million bad-debt deduction. The agent reported that
Lissack did not “provide[] any information for the adjusted
issues.” Lissack, 157 T.C. at 66; see J.A. 59 (Declaration of
Whistleblower Office Analyst).
In 2017, the Whistleblower Office denied Lissack’s claim
for an award. In the final determination letter, the
Whistleblower Office informed Lissack that his claim was
denied “because the IRS took no action on the issues you
raised.” J.A. 16. “After receipt of your information,” the letter
explained, “the IRS initiated an examination” of the
development group, “and the IRS reviewed the information
you provided as part of that examination. However, that review
did not result in the assessment of additional tax, penalties,
interest or additional amounts with respect to the issues you
raised.” J.A. 16. Finally, the letter informed Lissack that the
IRS did assess additional taxes against the taxpayer, “but the
information you provided was not relevant to those issues.”
J.A. 16.
Lissack petitioned the Tax Court to review the
Whistleblower Office’s adverse decision on his application for
an award. The IRS moved for summary judgment based on the
relevant portion of the administrative record and a declaration
from the Whistleblower Office analyst assigned to Lissack’s
claim. Lissack opposed the motion, arguing that the

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administrative record was incomplete because the IRS had
redacted too many documents in the administrative file.
Lissack also cross moved for partial summary judgment,
challenging certain provisions of the Whistleblower
Definitions Rule as contrary to the statute and contending that
the Service misapplied its rule.
In the decision now under review, the Tax Court granted
summary judgment in full in favor of the IRS. In a carefully
reasoned opinion, the Tax Court held that, although the IRS
“did initiate an action” based on the information Lissack
provided regarding membership deposits, he “is not eligible for
a whistleblower award” because “the IRS did not collect any
proceeds ‘as a result of th[at] action’” or any “related action.”
Lissack, 157 T.C. at 69-70 (alteration in original) (quoting
I.R.C. § 7623(b)(1)), 72, 76. The Tax Court held that the
undisputed facts showed Lissack had “supplied no information
to the IRS about [the development group’s] intercompany bad
debt deduction,” so he was not entitled to a percentage of the
proceeds collected in that action. Id. at 71.
In granting summary judgment, the Tax Court had “no
difficulty concluding that the regulation passes muster” under
Chevron. Id. at 74. The court noted that the statute “does not
describe or define an ‘administrative or judicial action’” so, as
relevant here, “leaves ample scope to the Secretary to define
the term” to refer to “‘all or a portion of’ an IRS civil or
criminal proceeding.” Id. at 72 (quoting 26 C.F.R. § 301.7623-
2(a)(2)). In other words, it saw the statutory language as
ambiguous regarding whether an expanded portion of an
examination is a separate administrative action as to which the
whistleblower’s contribution requires no award. Given that
ambiguity, the Tax Court held, the Whistleblower Definitions
Rule reasonably interprets the statutory terms “administrative
action” and “proceeds based on.” Id. at 75-76.

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The Tax Court also rejected Lissack’s remaining two
arguments. First, the court held that the investigation into the
bad debt was not a “related action,” under the IRS’s definition
of that term, to the action on the membership-deposit issue
Lissack identified. Id. at 76 (citing 26 C.F.R. § 301.7623-
2(c)(1)). It was neither “against a person other than the
person(s)” Lissack’s information identified, nor were “[t]he
facts relating to” the bad-debt action “substantially the same”
as the membership-deposit facts Lissack provided. Id.
(alteration in original) (quoting 26 C.F.R. § 301.7623-2(c)(1)).
Second, the court held that the administrative record sufficed,
providing “more than enough evidence to confirm that
petitioner is not eligible for a mandatory award.” Id. at 78. The
Tax Court noted that this is a “record rule” case, in which
summary judgment ordinarily is decided based on an
administrative record that “comprises all information
contained in the administrative claim file that is relevant to the
award determination and not protected by one or more common
law or statutory privileges.” Id. at 77 (first quoting Van
Bemmelen v. Comm’r, 155 T.C. 64, 79 (2020); and then
quoting 26 C.F.R. § 301.7623-3(e)(1)). Although
whistleblowers may file motions to compel production of
documents and to supplement the record, the Tax Court noted,
Lissack “filed no motion of either sort.” Id. at 78.
Lissack moved to vacate or revise the summary judgment
decision, and for reconsideration, but the Tax Court denied the
motion. On appeal, we held that the Tax Court had jurisdiction;
the Whistleblower Definitions Rule was a reasonable
interpretation of the statute under Chevron; and the Tax Court
correctly decided summary judgment on a sufficient
administrative record that Lissack never sought to supplement.
Lissack, 68 F.4th at 1320.

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This case now returns to us on remand from the Supreme
Court. Because Chevron is overruled, we consider Lissack’s
claims in light of the mandate to “exercise [our] independent
judgment in deciding whether an agency has acted within its
statutory authority.” Loper Bright, 144 S. Ct. at 2273.
DISCUSSION
The IRS argues that the Tax Court lacked jurisdiction over
Lissack’s appeal, and in any event reached the correct result.
Lissack counters that the Tax Court correctly exercised
jurisdiction but erred in granting summary judgment to the IRS
because the Whistleblower Definitions Rule conflicts with the
statute, a genuine factual dispute remains over whether the
revenue agent relied on Lissack’s submission, and the
administrative record was incomplete without the entire
examination file. We adhere to our prior holding that the Tax
Court had jurisdiction. Without any reliance on Chevron
deference, we are persuaded that the Whistleblower Definitions
Rule correctly interprets the statute. We reinstate as unaffected
by Loper Bright our judgment upholding the decision of the
Tax Court.
A. The Tax Court had jurisdiction.
“Any determination regarding an award under” subsection
7623(b)(1), (2), or (3), may be appealed to the Tax Court,
which “shall have jurisdiction with respect to such matter.”
I.R.C. § 7623(b)(4). Our jurisdiction over the merits of
Lissack’s petition, in turn, rests on the Tax Court having had
jurisdiction. Li, 22 F.4th at 1015. We consider the
jurisdictional question de novo, Myers v. Comm’r, 928 F.3d
1025, 1031 (D.C. Cir. 2019), and hold that the Tax Court had
jurisdiction.

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By its plain terms, subsection (b)(4)’s jurisdictional grant
applies to “[a]ny determination regarding an award.” I.R.C.
§ 7623(b)(4) (emphasis added). The Supreme Court has
“repeatedly explained” that “the word ‘any’ has an expansive
meaning.” Patel v. Garland, 142 S. Ct. 1614, 1622 (2022)
(quoting Babb v. Wilkie, 140 S. Ct. 1168, 1173 n.2 (2020)).
“Similarly, the use of ‘regarding’ ‘in a legal context generally
has a broadening effect, ensuring that the scope of a provision
covers not only its subject but also matters relating to that
subject.’” Id. (quoting Lamar, Archer & Cofrin,
LLP v. Appling, 138 S. Ct. 1752, 1760 (2018)). Congress
thereby made generous provision for judicial review of
Whistleblower Office award decisions.
The Service challenges the Tax Court’s jurisdiction based
on Li v. Commissioner, 22 F.4th 1014 (D.C. Cir. 2022). We
held in Li that a threshold rejection of a Form 211 (i.e., an
application for a mandatory award) was not a reviewable
“award determination under subsection (b)(1)-(3).” Id. at
1016; see id. at 1017-18. The Whistleblower Office had
concluded that Li’s Form 211 provided only “vague and
speculative information it could not corroborate, even after
examining supplemental material Li herself did not provide,”
so the Office did not even forward Li’s submission to an IRS
examiner. Id. at 1017. We referred to the text of subsection
(b)(1) to reason that a “threshold rejection of a Form 211 by
nature means the IRS is not proceeding with an action against
the target taxpayer,” and that “[t]herefore, there is no award
determination, negative or otherwise, and no jurisdiction for
the Tax Court.” Id. We expressly reserved in Li the question
of jurisdiction in cases in which the Whistleblower Office
“wrongly denied a Form 211 application” but the IRS
“nevertheless proceeded against a target taxpayer based on the
provided information.” Id. at 1017 n.2.

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The Service contends that our logic in Li—looking to
when the IRS “proceeds with” an action per subsection (b)(1)
as describing a jurisdictional prerequisite—compels us to
likewise treat as jurisdictional a second requirement of
subsection (b)(1): that the IRS have “collected proceeds” based
on the whistleblower’s information. IRS Br. 25. Because, in
the Service’s view of the merits, the proceeds it collected were
not recovered in the administrative action it took in response to
Lissack’s submission, it asserts the Tax Court lacked
jurisdiction under subsection (b)(4) as interpreted in Li. In
other words, as the IRS reads it, our decision in Li renders the
jurisdictional grant coextensive with the merits of a
whistleblower appeal. We disagree.
The fact that the IRS conducted an examination here
suffices to distinguish Lissack’s case from Li. Li never claimed
that the IRS proceeded with any administrative or judicial
action against the target taxpayer based on her submission. Li,
22 F.4th at 1017 n.2. Here, by contrast, there is no dispute that
the Whistleblower Office referred Lissack’s submission to the
IRS, and an IRS revenue agent initiated an examination of the
membership-deposits issue that Lissack identified. That
referral and examination count as the IRS “proceed[ing] with”
an “administrative action” that was “based on” the information
Lissack brought to the Secretary’s attention. I.R.C.
§ 7623(b)(1). And the “determination regarding an award” was
the Whistleblower Office letter to Lissack informing him that
the examination it initiated based on the information he
provided did not result in the collection of any proceeds, so he
was not entitled to an award.
These facts distinguish this case from Li, in which the IRS
declined to take any action at all after receiving an application
for a whistleblower award. Our holding in Li that the Tax Court
lacked jurisdiction reflects the “general unsuitability for

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judicial review of agency decisions to refuse enforcement.”
Heckler v. Chaney, 470 U.S. 821, 831 (1985) (reiterating the
principle that “an agency’s decision not to prosecute or enforce,
whether through civil or criminal process, is a decision
generally committed to an agency’s absolute discretion”).
Here, unlike in Li, the Service took action against the taxpayer
Lissack identified, and the parties dispute whether Lissack is
entitled to any of the money the IRS eventually collected from
that taxpayer.
In sum, contrary to the Service’s position, the statute does
not require a whistleblower to establish a meritorious claim to
an award before the Tax Court may exercise jurisdiction to
review the IRS’s determination on that claim. An “unusually
high degree of clarity” is required to treat statutory
requirements as jurisdictional, Myers, 928 F.3d at 1035, and, as
just explained, subsection (b)(4) does not clearly support the
Service’s reading. To hold otherwise would impute to
Congress an intent to authorize appeals by whistleblowers who
believe their awards are too low, but bar appeals by
whistleblowers like Lissack whose tips the IRS acts on, but
who receive no award at all. To be sure, unless the IRS has
made some adjustment, it is unclear what relief a whistleblower
could be seeking. But the Whistleblower Office in this case
made substantial adjustments. The merits dispute is whether
Lissack’s concededly nonfrivolous submission entitles him to
share in the IRS’s recovery from the taxpayer he identified. We
need not delineate the precise line between an unreviewable
threshold rejection and a reviewable determination to conclude
that the decision here was a “determination regarding an
award” under subsection (b)(4).
Consistent with the plain terms and structure of the statute
and our decision in Li, the Tax Court had jurisdiction over
Lissack’s appeal.

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B. The challenged regulations correctly interpret the
tax whistleblower statute.
Lissack challenges three provisions of the Whistleblower
Definitions Rule. As a general matter, we review the decisions
of the Tax Court “in the same manner and to the same extent
as decisions of the district courts in civil actions tried without
a jury.” I.R.C. § 7482(a)(1). We accordingly review the Tax
Court’s legal rulings de novo, Byers v. Comm’r, 740 F.3d 668,
675 (D.C. Cir. 2014), and, on remand following Loper Bright,
we do so without the deference we previously accorded the
Secretary’s interpretation of the whistleblower statute. The
Tax Court treated the relevant portion of the statute as
ambiguous and upheld the IRS’s interpretation as reasonable
under Chevron. On appeal, the IRS defended the Tax Court’s
conclusion that the Whistleblower Definitions Rule reasonably
construed ambiguous statutory text, whereas Lissack objected
that subsection 7623(b) unambiguously supported his
competing construction. Following the Supreme Court’s
decision to grant Lissack’s petition, vacate our judgment, and
remand the case for consideration in light of Loper Bright, no
party sought an opportunity for supplemental briefing.
Having set aside Chevron’s framework and carefully
reconsidered the statutory issues de novo, we now hold that the
Whistleblower Definitions Rule is a proper exercise of the
Treasury Department’s authority under I.R.C. § 7623’s
mandatory-award provision.
1.
Lissack argues that, under the plain language of the statute,
he is entitled to a whistleblower award because the IRS would
not have opened an examination into the condominium
development group’s tax problems but for his submission. He
challenges the regulatory provisions that control the IRS’s

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determinations of whether any proceeds were “collected as a
result of” an IRS “administrative action” to which a
whistleblower “substantially contributed.” I.R.C.
§ 7623(b)(1). First, he challenges the provision of the Rule
defining an “administrative action” that the IRS treats as
“based on” a whistleblower submission under subsection (b)(1)
to be “all or a portion of” a proceeding that may yield collected
proceeds. 26 C.F.R. § 301.7623-2(a)(2). Second, he
challenges an example (Example Two) that illustrates how,
when the IRS discovers “additional facts that are unrelated to
the activities described in the information provided by the
whistleblower” and accordingly expands the scope of the
examination, the investigation into those unrelated facts “[is]
not action[] with which the IRS proceeds based on the
information provided by the whistleblower.” 26 C.F.R.
§ 301.7623-2(b)(2) (Example 2).
Lissack’s challenge therefore requires us to answer two
questions: First, whether the tax whistleblower statute requires
the IRS to consider the “whole action”—in this case, all its
examination activity—regarding one taxpayer as a single
administrative action, and, second, whether the statute
mandates an award whenever the whistleblower’s information
was the but-for cause of the IRS’s initiation of an investigation
of the taxpayer, even if the IRS’s ultimate collection of
proceeds found no factual support in the information the
whistleblower provided.
We hold that the Whistleblower Definitions Rule correctly
implements the tax whistleblower statute. In this context, the
ordinary meaning of “administrative action”—activities by
executive agencies—makes the most sense if read to mean
administrative action on the discrete tax issue or issues the
whistleblower’s information identifies. The statutory context
also makes clear that an administrative action “proceeds based

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on” a whistleblower’s information when that information has
substantially contributed to the IRS’s administrative action and
its ultimate recovery.
“We begin, as in any case of statutory interpretation, with
the language of the statute.” CSX Transp., Inc. v. Ala. Dep’t of
Revenue, 562 U.S. 277, 283 (2011). Subsection (b) of Section
7623, the mandatory-award provision, requires the Treasury
Secretary to pay awards of 15 to 30 percent “of the proceeds
collected as a result of the action (including any related
actions)” whenever 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.” I.R.C. § 7623(b)(1). The cross reference to
subsection (a) tells us that the “administrative action[s]”
subject to mandatory whistleblower awards are actions for
“detecting underpayments of tax” or “detecting and bringing to
trial” persons who violate or “conniv[e]” to violate internal
revenue laws. Id. § 7623(a).
The statute does not further define “administrative action,”
so we look to the ordinary meaning of the phrase. See CSX
Transp., Inc., 562 U.S. at 284. “Administrative” describes
“administration,” which in the context of regulatory activity
refers to “[t]he executive branch of a government.”
WEBSTER ’S II DICTIONARY 11 (3d ed. 2005). “Action” is “[a]n
act or deed.” Id. at 9; see also Action, B LACK’S LAW
DICTIONARY (11th ed. 2019) (“[t]he process of doing
something; conduct or behavior”). The phrase “administrative
action,” then, generally refers to acts of executive agencies.
Two other phrases from subsection (b)(1) help inform the
scope of “administrative action” as the term is used here:
“based on” and “substantially contributed.” I.R.C.
§ 7623(b)(1). The IRS must pay an award only where it

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“proceeds based on” information that a whistleblower
provides. Id. The statute does not define or explain what level
of causation “based on” implies. Lissack argues it is
necessarily met by but-for causation, requiring an award
whenever the whistleblower’s information appears within the
causal chain leading the IRS to recover proceeds from a
delinquent taxpayer. But the Whistleblower Definitions Rule
defines when the Service “proceeds based on” whistleblower
information as limited to cases in which “the information
provided substantially contributes to an action against a person
identified by the whistleblower.” 26 C.F.R. § 301.7623-
2(b)(1).
The IRS’s “proceeds based on” rule more accurately
carries out the statutory requirement that the whistleblower
information have “substantially contributed” to a recovery than
does Lissack’s but-for reading. I.R.C. § 7623(b)(1). The
statute says that the size of a mandatory award within the stated
range “shall depend upon the extent to which the individual
substantially contributed to such action.” Id. In pegging the
award amount to the degree of substantiality of the
whistleblower’s assistance, the statute plainly means that all
such awards depend on the whistleblower having contributed
in some substantial degree to the Service’s ability to proceed.
But-for cause is not enough. The Whistleblower Definitions
Rule therefore correctly interprets the statute to require awards
only to whistleblowers who identify underpayments and
provide information that advances to some substantial degree
the IRS’s recovery of those underpayments.
Lissack makes two principal counterarguments. First, he
argues that this interpretation is contradicted by what he claims
is the IRS’s past practice of treating an examination as a single
administrative action. He says that when Congress amended
the statute in 2006 to add mandatory whistleblower awards, it

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intended to incorporate the IRS’s then-existing practice.
Pointing to a committee staff summary of the 2006
amendments, Lissack contends it shows the IRS did not
previously identify distinct administrative actions within a
larger examination.
Lissack’s past-practice argument misses the mark. Before
2006, whistleblower awards were entirely at the discretion of
the IRS, § 1209, 110 Stat. at 1473. The statute did not specify
how the Service might parse the roles of whistleblower
submissions in its proceedings and, indeed, the Service had no
need to do any such parsing. We are unpersuaded that the
Service’s decision not to identify distinct issues or portions of
an examination when making awards that rested entirely within
its own discretion has any relevance to wholly new
requirements under the mandatory-award provisions of the
2006 Act.
Second, Lissack defends his but-for causation rule,
arguing that he provided “valuable information” insofar as he
informed the IRS that the condominium development group
taxpayers “are the type of taxpayers to misstate their tax
liability generally, and debt in particular.” Appellant’s Br. 10.
The IRS responds that the Whistleblower Definitions Rule
correctly interprets the statute to require awards only to
whistleblowers whose information advances the IRS’s
recovery to a substantial degree. We find ample reason to
doubt that Congress intended to entitle whistleblowers to
substantial awards just for raising plausible but meritless
concerns about taxpayers who, on the IRS’s further
investigation of separate leads, turn out to be noncompliant in
some other, unrelated way. Under Lissack’s rule, someone
who triggered even a small, fruitless investigation could claim
a mandatory payout whenever the IRS’s own further
examination yields a separate, large adjustment. Such a regime

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likely would encourage whistleblowers to flyspeck major
taxpayers in search of any plausible hint of underpayment. The
IRS’s approach, in contrast, adheres to the statute by
calibrating mandatory awards to the fruits of the particular IRS
actions that the whistleblower’s information substantially
assists.
Congress directed the IRS to reward whistleblowers based
on the extent of their substantial contributions to recovery of
unpaid taxes. The challenged provisions of the Whistleblower
Definitions Rule measure contributions according to the degree
to which the whistleblower’s specific facts aid the relevant
portion of an examination. Those provisions are a valid
exercise of the IRS’s authority under the tax whistleblower
statute.
2.
Even if the “administrative action” definition and Example
Two are valid and the bad-debt investigation was a separate
action not based on his submission, Lissack contends that the
IRS’s separate action should count as a “related action,”
entitling him to a share of its proceeds. Under the mandatory-
award provision, the IRS must pay whistleblowers awards
amounting to 15 to 30 percent “of the proceeds collected as a
result of the action (including any related actions).” I.R.C.
§ 7623(b)(1) (emphasis added). The statute does not define
“related actions.” The IRS reads the phrase to refer to actions
against other taxpayers, not named by the whistleblower, based
on substantially the same facts such that the Service can—
without independent investigation—also recover against those
other persons. 26 C.F.R. § 301.7623-2(c).
Lissack argues that the IRS’s rule defining “related action”
impermissibly narrows the statute’s reach. He contends
“related actions” includes actions against the same taxpayer for

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underpayments different from those identified in the
whistleblower’s submission. In support, Lissack invokes
ordinary meanings of “related” as “belonging to the same
family, group, or type; connected,” Appellant’s Br. 35 (quoting
an unidentified edition of the Oxford English Dictionary), and
he asserts that the IRS investigation of the condominium
development group’s bad debt was necessarily “related” to the
group’s membership-deposits problem his submission
identified.
The challenged rule instead defines a “related action”
more specifically, as an action against someone the
whistleblower did not identify but who engaged in factually
parallel nonpayment that the whistleblower’s information,
without more, enabled the IRS to detect and recover. 26 C.F.R.
§ 301.7623-2(c). Under the rule, “related action” is “an action
against a person other than the person(s) identified in the
information provided and subject to the original action(s)”
where three conditions are met: (1) the action involves
“substantially the same” facts as the whistleblower submission,
(2) “[t]he IRS proceeds with the action against the other person
based on the specific facts described and documented” in the
submission, and (3) “the IRS can identify the unidentified
person using the information provided (without first having to
use the information provided to identify any other person or
having to independently obtain additional information).” Id.
In considering whether the rule correctly defines “related
actions,” we look to the IRS’s statutory analysis for its
persuasive value. As the Court reiterated in Loper Bright,
“courts may—as they have from the start—seek aid from the
interpretations of those responsible for implementing particular
statutes.” 144 S. Ct. at 2262 (citing Skidmore v. Swift & Co.,
323 U.S. 134, 140 (1944)). While agency interpretations are
not controlling, they nonetheless “constitute a body of

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experience and informed judgment to which courts and
litigants may properly resort for guidance.” Skidmore, 323
U.S. at 140. We assess the persuasive value of an agency’s
interpretation under Skidmore based on “the thoroughness
evident in its consideration, the validity of its reasoning, its
consistency with earlier and later pronouncements, and all
those factors which give it power to persuade, if lacking power
to control.” Id.
The Rule’s definition of “related action” makes good sense
of that statutory phrase in context. It unites actions that involve
“substantially the same” facts to reward whistleblowers whose
submissions enable the IRS, without further investigation, to
identify additional noncompliant taxpayers. That logic accords
with the statute, which directs the IRS to grant awards from
recoveries based on a whistleblower’s information according
to the substantiality of the whistleblower’s contribution. See
I.R.C. § 7623(b)(1). The preamble to the final Whistleblower
Definitions Rule shows that the Department of the Treasury
considered and rejected broader definitions of “related action,”
including the type of acontextual dictionary definition Lissack
puts forth. See Awards for Information Relating to Detecting
Underpayments of Tax or Violations of the Internal Revenue
Laws, 79 Fed. Reg. 47,246, 47,251-52 (Aug. 12, 2014)
(codified at 26 C.F.R. pt. 301). It noted that, when the IRS
relies on a whistleblower’s information about a person he
identified, the general rule delineates the award due. Id. at
47,252; see 26 C.F.R. § 301.7623-2(b)(1). The IRS
accordingly reads the statute’s inclusion of “related action” to
“encompass[] a finite group of actions that, while likely
unknown to the whistleblower, are objectively connected to the
information provided.” 79 Fed. Reg. at 47,253/3. We are
persuaded by that analysis.

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Lissack makes two counterarguments. He argues that
Congress would have chosen a narrower term than “related”
had it intended the IRS’s reading. Because “Congress never
limited related actions to actions relating to another taxpayer,
which it easily could have,” Lissack says, the IRS should not
be able to include that limitation in its definition. Appellant’s
Br. 36. But the mere possibility that the statute could have been
worded even more clearly does not defeat the IRS’s reading.
See, e.g., Slack Techs., LLC v. Pirani, 598 U.S. 759, 769
(2023).
Lissack also looks to the False Claims Act (FCA) for
support. He argues that I.R.C. § 7623 was modeled after the
FCA and therefore implicitly adopts its provision stating that,
if the Government opts to pursue a qui tam plaintiff’s civil
action through any “alternate remedy” available to it (such as
an administrative penalty proceeding), the qui tam plaintiff is
entitled to the same share of the award as if the claim had
proceeded in court. 31 U.S.C. § 3730(c)(5). The Tax Court
held that the FCA alternate remedy provision “has no
application to a tax case such as this,” and that it was in any
event unmet here, where “the IRS did not just pursue ‘a
different legal theory’ for the membership deposits issue,” but
proceeded on “an entirely unrelated issue—the bad debt
deduction—that was governed by different law and different
facts.” Lissack, 157 T.C. at 77. The Tax Court correctly held
that the bad debt deduction was a distinct tax issue, not an
alternative means of pursuing the membership deposit issue
that Lissack reported. Lissack’s reliance on the FCA to inform
the definition of “related actions” in I.R.C. § 7623 is therefore
unpersuasive.
Lissack has not established that the IRS rule misinterprets
the statute’s inclusion of recoveries from any “related action,”

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and he does not contend that the rule is otherwise contrary to
the APA.
C. The Tax Court had no obligation to conduct a
trial de novo.
In challenging the Tax Court’s affirmance of the
Whistleblower Office determination denying him an award
under I.R.C. § 7623(b)(1), Lissack argues that summary
judgment is foreclosed here by a genuine factual dispute over
whether the revenue agent relied on Lissack’s submission to
identify the bad-debt issue. He contends that the Tax Court
erroneously accepted an administrative record that was
incomplete because it did not include the entire examination
file.
The parties agree that we review legal rulings of the Tax
Court de novo, including rulings on motions for summary
judgment, Byers, 740 F.3d at 675, but they dispute the correct
standard of review in the Tax Court. Lissack argues that the
Tax Court should review determinations of the Whistleblower
Office “as it reviews cases under the Tax Court’s original
deficiency jurisdiction,” Appellant’s Br. 40—by “trial de
novo,” Ax v. Comm’r, 146 T.C. 153, 161 (2016)—instead of
confining its review to the administrative record. Lissack
critiques the Tax Court’s decision in Kasper v. Commissioner,
150 T.C. 8 (2018), which held that the Tax Court reviews
whistleblower award decisions under APA section 706(2)(A)
based on the administrative record. Id. at 14-15, 20-22. Two
amici join Lissack to argue that de novo factfinding by the Tax
Court would better serve Congress’s intent to establish
meaningful review of Whistleblower Office decisions.
The IRS defends the standard of review established in
Kasper. It also argues that we have no occasion here to reach
the issue “because the denial of Lissack’s claim was correct

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under any standard of review.” IRS Br. 45. We agree that the
Tax Court’s decision is correct under any standard of review,
so we have no occasion to pass on the merits of Kasper.
Lissack’s appeal is comprised of legal questions, including
(1) the validity of the Whistleblower Definitions Rule, (2)
whether material disputes of fact preclude summary judgment,
and (3) the adequacy of the record before the Tax Court.
First, in resolving Lissack’s legal challenges to the IRS’s
interpretations of relevant statutory terms, the Tax Court
conducted de novo review to identify statutory ambiguity and
analyze the Whistleblower Definitions Rule under Chevron,
while this court now determines without reliance on Chevron
whether the Rule comports with I.R.C. § 7623.
Second, the propriety of summary judgment is likewise a
legal question considered de novo. Lissack asserts that the Tax
Court should not have granted summary judgment because key
record facts are disputed, but he fails to show that to be the
case. A factual dispute is “material,” precluding summary
judgment, only “if its resolution ‘might affect the outcome of
the suit.’” Trudel v. SunTrust Bank, 924 F.3d 1281, 1285 (D.C.
Cir. 2019) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S.
242, 248 (1986)). The IRS agrees with Lissack’s factual
assertion that it would not have opened any examination of the
condominium development group if not for Lissack’s Form
211. The problem for Lissack is that the but-for causal link he
emphasizes is legally insufficient to support his claim.
We, like the Tax Court, recognize that the IRS would have
made no tax adjustment on the bad debt if it had not opened an
examination on Lissack’s submission regarding the taxpayer’s
treatment of membership deposits. Cognizant of that fact, our
de novo review of the summary judgment yields the same
conclusion as the Tax Court’s: Under the statute and Rule, the

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adjustment was not “a result of” the “administrative action”
regarding membership deposits that the IRS undertook “based
on” Lissack’s information, or to which his information
“substantially contributed.” I.R.C. § 7623(b)(1). As we have
already explained, see supra Discussion Part B, administrative
actions on the membership-deposits issue and the bad-debt
issue are distinct and unrelated as a matter of law under the
valid Whistleblower Definitions Rule. 26 C.F.R. §§ 301.7623-
2(a)(2), (b)(1), (c)(1).
Lissack insists that discovery would have established that
the revenue agent relied on his submission, but the facts he says
he sought to uncover would establish nothing more than but-
for causation. In other words, he argues he needs discovery to
support an already-accepted factual premise: The examination
triggered by Lissack’s whistleblower submission led to the
IRS’s own investigation into the bad debt. He claims he should
have been afforded discovery regarding “how the Revenue
Agent discovered the other issues.” Appellant’s Br. 49. In
Lissack’s view, such information is material “to determine if
the issues are ‘related’ and how helpful the whistleblower’s
information was to the Revenue Agent.” Id. Had the
administrative record included the “entire taxpayer audit file,”
Lissack contends, he could have shown that the revenue agent’s
discovery of the intercompany bad-debt issue relied on the
membership-deposits information Lissack submitted. Id. at 54.
Again, for the reasons already discussed, see supra Discussion
Part B, none of those additional facts could support a judgment
in his favor.
Third, Lissack argues that the record before the Tax Court
was inadequate. Amici agree. They contend that the statute
contemplates trial de novo in the Tax Court. They argue the
text, context, and drafting history of the statute so require.
Lissack and amici point out that confining judicial review to

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the administrative record is anomalous here because the
Whistleblower Office makes the records of its award
determinations without adjudicatory procedures, public
comment, or other opportunity for stakeholders—including the
whistleblower—to be heard. Amicus Whistleblower 11099-
13W also contends that judicial deference to the Whistleblower
Office is inappropriate because the Office’s determinations
involve no “technically complex issue within an agency’s
unique expertise,” only the kind of matter “that courts are
called upon to resolve every day.” Amicus Whistleblower
11099-13W Br. 10-11.
We need not here decide whether the Tax Court must
conduct a trial de novo on an appeal of a Whistleblower Office
determination, nor what standard of review applies to a
challenge to the scope of the record the IRS submitted to the
Tax Court, because Lissack made no request before the Tax
Court to expand the administrative record or create a new one.
If Lissack believed the record was inadequate, he should have
sought to compel production of documents to supplement the
record, but he concedes he failed to do so. Reply Br. 25-27.
Lissack counters that he should not have had to do so,
because he moved only for partial summary judgment on his
legal challenge to the Whistleblower Definitions Rule,
anticipating that “resolution of that issue would dictate whether
[he] needed to get into a long discovery fight.” Id. at 25. But,
as the Tax Court explained when rejecting his motion for
reconsideration, even after that court granted the IRS’s cross-
motion for summary judgment Lissack did not seek
supplementation of the administrative record, nor did he
“identif[y] any gaps in the administrative record” (nor, for that
matter, did he point to any information in his own
whistleblower submission) that “was relevant to the bad debt
deduction issue.” J.A. 369. In view of Lissack’s failure to

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preserve the point, we affirm the Tax Court’s decision to base
its review on the portions of the administrative record the IRS
compiled and submitted as relevant.
As the Tax Court acknowledged, some whistleblower
claims may require discovery and judicial factfinding. But
even had he not forfeited the point, Lissack has not shown that
he was deprived of any material evidence. Again, on Lissack’s
own account, the factual point he sought to bolster was but-for
causation. But “[h]ow the revenue agent discovered” the
intercompany bad-debt issue, Appellant’s Br. 49, was both
undisputed in his favor, and immaterial. Lissack does not
assert that broader access to the IRS files would reveal that his
own submission to the IRS contained information on the
condominium development group’s treatment of intercompany
bad debt. And, under the statute and Rule, that bad-debt issue
remains unrelated to the membership-deposits issue he
identified. We see no error in the Tax Court’s rulings on
Lissack’s record-inadequacy claims.
In sum, the Tax Court correctly concluded that “the record
provides more than enough evidence to confirm that petitioner
is not eligible for a mandatory award,” and ruled in favor of the
IRS as a matter of law. Lissack, 157 T.C. at 78. The Tax Court
credited information in the administrative record showing that
“none of the adjustments had anything to do with the
membership deposits issue,” including the revenue agent’s
report that Lissack “had not ‘provided any information for the
adjusted issues,’” and the Whistleblower Office analyst’s
confirmation that Lissack “had made no allegations and
submitted no facts related to [the development group’s]
intercompany debt (or any other adjustment).” Id. at 66.
Lissack failed to challenge before the Tax Court its reliance on
the administrative record or object to the scope of that record,
and even now he does not identify information he would have

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sought that could have created a material factual dispute
precluding summary judgment.
* * *
For the foregoing reasons, we reinstate our decision
affirming the judgment of the Tax Court.
So ordered.

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