Arthur M. Bialer

United States Tax Court T.C. Memo. 2026-110 ARTHUR M. BIALER, Petitioner v. COMMISSIONER OF INTERNAL REVENUE, Respondent ————— Docket No. 6983-19W. Filed October 29, 2026. ————— In June 2005 WB1 (unrelated to P) revealed to R information about a tax abuse being undertaken by Institution 1 to avoid U.S. withholding taxes. In July 2005 he filed Form 211, “Application for Award for Original Information”, reporting the abuse and requesting an award. In October 2007 WB1 gave to the U.S. Senate Permanent Subcommittee on Investigations (“PSI”) information about the tax abuse being undertaken by Institution 1. In May 2007 P gave information about the tax abuse to R. In September 2007 P submitted Claim T on Form 211, reporting the abuse by Target and requesting the award. A copy of Claim T was forwarded to a subject matter expert (“SME”) in an IRS operating division but was not yet provided to an audit team. P did not ever give information to PSI. In September 2008 the PSI issued a public “PSI report”, describing strategies used by numerous large commercial taxpayers to avoid withholding taxes. The PSI report presented “Six Case Histories of Dividend Tax Abuse” concerning financial institutions (including the Institution 1, Institution 2, and Target). The strategies that the PSI reported were similar to the abuses described Served 10/29/26  2 [*2] in P’s Claim T. In October 2008 WB1 submitted a second Form 211, describing withholding tax schemes employed by all the taxpayers addressed in the PSI Report, including Target. In December 2008 the SME forwarded to an audit team the PSI Report and WB1’s information. P’s information in Claim T was not forwarded to the audit team until January 2010. The audit team found P’s Claim T information unhelpful. The audit team used the PSI Report information and not P’s information to pursue tax abuse at Target. The team determined a tax deficiency, and Target settled with the IRS and paid the deficiency. In December 2013 the audit team transmitted to the WBO a Form 11369, “Confidential Evaluation Report on Claim for Award”, stating that “[t]he information provided by the Whistleblower (‘WB’) was already under consideration and provided no additional value.” In April 2019 the WBO issued a final determination letter denying Claim T. Held: For purposes of I.R.C. § 7623(b), the final determination of Claim T was the written denial issued by the WBO in April 2019, not a decision by the audit team not to use Claim T in its audit. Held, further, the WBO did not abuse its discretion in determining, consistent with the audit team’s recommendation, that the IRS did not “proceed[] with any administrative or judicial action . . . based on” P’s information in Claim T and denying his claim for an award. See I.R.C. § 7623(b)(1). ————— Michael A. Humphreys, for petitioner. Comfort E. Aduwa, Gary E. Merken, and Audra Dineen Sharma, for respondent.  3 [*3] MEMORANDUM OPINION GUSTAFSON, Judge: Petitioner, Arthur M. Bialer, asks the Court to review the denial, by the Whistleblower Office (“WBO”) of the Internal Revenue Service (“IRS”) of his claim under section 7623(b) 1 for a whistleblower award. Currently before us are four motions. Three are Mr. Bialer’s motions (Docs. 162, 164, 167) to supplement the Administrative Record, which we will deny, and the fourth is the Commissioner’s motion for summary judgment (Doc. 175), which we will grant. Background For purposes of the pending motions, we assume the following facts derived from the administrative record. In addition, in order to understand Mr. Bialer’s contentions and resolve his motions to supplement, we consider additional documents (from Docs. 109 and 170) that his motions ask us to include in the administrative record, but we conclude that those documents show no abuse of discretion in the WBO’s denial of the award claim, are immaterial to the actual issues before us, and have no effect on our ruling on the Commissioner’s motion. WB1’s independent claim in 2005 In June 2005 a whistleblower (“WB1”) who was not connected with Mr. Bialer independently revealed to the IRS a “dividend tax abuse involving offshore entities attempting to avoid US withholding taxes [under sections 1441 and 1442] on payments of dividends from US companies by engaging in equity swap and stock loan transactions which are facilitated by financial institutions.” (AR, at 0105.)2 WB1’s information concerned his employer, to whom we refer as “Institution 1”. On July 25, 2005, WB1 filed Form 211, “Application for Award for 1 Unless otherwise indicated, statutory references are to the Internal Revenue Code, Title 26 U.S.C., in effect at the relevant times, and regulation references are to the Code of Federal Regulations, Title 26 (Treas. Reg.), in effect at the relevant times. A citation in this opinion of a “Doc.” refers to a document so numbered in the Tax Court docket record of this case. The certified administrative record (Doc. 43) is cited here as “AR”; the supplemental administrative record (Doc. 115) is cited here as “SAR”. Specific pages thereof are cited by their Bates pagination. 2 See also Whistleblower 8391-18W v. Commissioner, 161 T.C. 58 (2023), vacated and remanded sub nom. In re: Sealed Case, 152 F.4th 205 (D.C. Cir. 2025). Mr. Bialer asserts (see Doc. 164, at 14 & n.24) that WB1 is the whistleblower in Whistleblower 8391-18W, and we so assume for purposes of the Commissioner’s motion.  4 [*4] Original Information”, his first claim for an award based on this information. (AR, at 0105.) WB1’s claim remained pending for some time thereafter. Petitioner’s previous whistleblower Claim S Not immediately relevant to this case, but part of its background and context, is a previous, successful whistleblower claim made by Mr. Bialer. The parties refer to this previous claim as “Claim S”, and we follow the same convention. In January 2006 Mr. Bialer met with personnel from the IRS’s Large Business and International division (“LB&I”) 3 to provide information concerning a financial institution that was his employer at the time (to which we refer here as “Institution 2”) and to allege abusive avoidance of the section 1441 and 1442 foreign dividend withholding tax requirements (Doc. 109, at 0182) through a “total return swap” (“TRS”) (SAR, at 0020, 0128; Doc. 109, at 0006, 0042). In June 2006 Mr. Bialer and LB&I entered into a special agreement (Doc. 109, at 0204–08), under which he would provide information regarding Institution 2’s activities in exchange for an award under section 7623 equal to 15% of the net taxes, fines, and penalties collected on the basis of the information he provided. Using Mr. Bialer’s information, an LB&I Financial Services field team opened an examination of Institution 2’s tax returns for 2003, 2004, and 2005, and (guided by the information and evidence Mr. Bialer provided) determined, assessed, and collected substantial deficiencies of Institution 2. (Doc. 109, at 0188–92.) Mr. Bialer did not submit a Form 211. Rather, a copy of the special agreement was forwarded to the WBO to review and process Mr. Bialer’s claim for an award. (Doc. 109, at 0203.) Mr. Bialer eventually received in 2015 a reward for his information on Institution 2 in Claim S. 4 3 In 2006 the division was called the “Large and Mid-Size Business division” (“LMSB”), but it was renamed “LB&I” starting October 1, 2010, as part of an IRS internal reorganization. I.R.S. News Release IR-2010-88 (Aug. 4, 2010). In this Opinion we use the new name whether before or after the reorganization. 4 The WBO Award Recommendation Report for Claim S, dated January 31, 2014, states: Per the Special Agreement, it is determined BIALER is entitled to 15% of the net taxes, fines and penalties (but not interest) collected from [Institution 2]. The information provided by BIALER was specific and  5 [*5] Prelude to petitioner’s 2007 Claim T In May 2007, while Mr. Bialer’s 2006 Claim S was being processed, he and his former counsel (the late Sheldon Cohen, former Commissioner of Internal Revenue) gave a presentation to Stephen Whitlock (then director of the WBO) and a subject-matter expert from the LB&I division on the technical mechanisms used to avoid the foreign dividend withholding requirements of sections 1441 and 1442 through TRS transactions—the activity at issue in Claim S. (AR, at 0059.) During this presentation (“the pre-filing presentation”), Mr. Bialer also provided information about a new entity (the “Target” at issue here) 5 and one of its related entities (“Target Entity 1”) avoiding foreign dividend withholding requirements through TRS transactions. 6 was responsible for the identification of the taxpayer, the understanding of the transaction and the development of the issue/adjustments. BIALER met all the conditions of the Special Agreement. (Doc. 109 at 0191.) In July 2015 Mr. Bialer received a substantial award. (Doc. 109, at 0176–77.) 5 Mr. Bialer’s chart (SAR, at 0016) suggests that Target is “doing ‘yield enhancement’. I can attempt to get more info if necessary.” The chart explained that he “[i]nterviewed for a position in their [i.e., Target’s] equity derivatives area. Various discussions stressed the importance to their business. Former senior [Target] person said to me that he heard [Target] is now doing things that are extremely aggressive and likely not OK.” With his chart Mr. Bialer also provided a copies of published articles, two of which mentioned Target: In a May 2007 article (SAR, at 0025) entitled “The Crackdown on Stock-Loan Schemes: A criminal probe by the feds may reveal some of the mysteries of short sellers”, Target was one of several companies mentioned. And a July 2005 article entitled “Italian Police Probing Three U.S. Banks for Tax Fraud” (SAR, at 0035) mentioned Target among several companies that were “being investigated by Italian finance police for improperly seeking 4.2 billion euros ($5 billion) in tax refunds. . . . [The companies] temporarily transferr[ed] the ownership of shares of Italian securities to French and British investors just before dividend payments and then request[ed] the tax credit.” 6 In a motion to compel, Mr. Bialer previously contended (Doc. 127, at 3 n.1) that, in this pre-filing presentation, he also gave information about “Consolidated Cayman Stock Borrowing” (“CCSB”) and “Foreign withholding Tax Credit” (“FwTC”) transactions that he later elaborated in his Form 211, discussed below. The pre-filing presentation did not use these acronyms, but as to FwTC Mr. Bialer seems to assert (Doc. 127, at 2–3) that this was the subject of the reference in his chart (SAR, at 0016 (second row)) to “Non-US shares sold to and returns swapped with [Institution 2]. [Institution 2] will claim a tax credit on US returns for withholding, assuming 901k. The tax credit may be voided if the swap is reclassified as a custodial relationship.” The pre-filing presentation explains that 901k means “901(k) exemption for the 15 day  6 [*6] As Mr. Bialer notified his former counsel via email of August 3, 2007, “my conversations with [Target in late-June and early-July of 2006] confirmed that the activities of 1999 were continuing in 2006.” (AR, at 0068.) Thereafter, Mr. Bialer’s former counsel wrote the following to Mr. Whitlock in a letter dated August 9, 2007: [Mr. Bialer] has developed another very promising matter which I would like to present to you on his behalf. Before I submit the reward claim, I would like to discuss this new matter with you or a member of your staff. [Mr. Bialer] was interviewed for a staff position within the last year by [Target]. During the course of multiple interviews . . . they expressed great interest in his knowledge of ‘dividend yield enhancement’ . . . put[ting] the dividend in an exempt entity or an offshore entity so as to avoid the withholding tax. They discussed this with him openly and from their action he believes they are currently engaged in such activity. . . . I seek your advice on how best to go forward with this matter . . . and whether it is appropriate to submit a Form 211 or to discuss this with you or your staff [on] completion of this matter. (SAR, at 0037.) Petitioner’s September 2007 Claim T now at issue On September 5, 2007, Mr. Bialer submitted to the WBO a Form 211 (AR, at 0048), with attachments (AR, at 0050–74) that requested an award for providing information regarding Target and “related entities”. (In this litigation the parties refer to this as “Claim T”, and in this Opinion we follow that convention.) As later described by Mr. Bialer (AR, at 0002), his Claim T “disclosed a structure for vastly expanding unhedged holding period. This allows an entity to apply the w/h tax against US tax liability while maintaining a hedge.” (SAR, at 0020.) It is possible that the second forwarded article (SAR, at 0035) quoted above in note 5 may relate to FwTC. Mr. Bialer articulated none of these contentions in his opposition (Doc. 183) to the motion for summary judgment. These documents were among the subjects of his first motion to supplement (Doc. 83), which we granted in part (see Doc. 110); but his opposition to the pending motion for summary judgment makes no mention of his pre-filing presentation.  7 [*7] the market for abusive withholding tax transactions of the type documented in my prior claim [Claim S] with respect to [Institution 2].” In support of Claim T, Mr. Bialer submitted to the IRS the following: (1) copies of indicative terms sheets for TRS transactions that Target engaged in during 1997 and 1999; (2) Mr. Bialer’s interview schedule with Target from June 30, 2006, and July 13, 2006; (3) copies of correspondence between Mr. Bialer and Robert Gardner, an agent of the WBO; and (4) copies of correspondence between Mr. Bialer and his former counsel. (AR, at 0050–74.) (The audit team’s later description (in 2013) of this 2007 submission and its defects is given below at pages 11–13.) Mr. Bialer asserts (Doc. 183, paras. 12–14) 7 that his Claim T described particular abuses by Target that he now refers to as CCSB and FwTC. They are not referred to as such in Claim T (nor in his pre- filing presentation). Claim T was forwarded within the IRS for case-building on October 9, 2007. (AR, at 0007, 0082.) On October 26, 2007, a copy was provided to a whistleblower Subject Matter Expert (“SME”) at the Financial Services unit of LB&I (AR, at 0007), but it was not yet provided to an LB&I audit team. WB1 and the 2007 Wall Street Journal article Meanwhile, avoidance of the withholding tax was receiving increased public attention. While still awaiting action on his 2005 claim, WB1 began in late 2006 to work with an investigative reporter of the Wall Street Journal (“WSJ”) “to assist in outlining how the industry was not only supporting but developing and marketing various fraudulent tax strategies,” and an article was eventually published on the front page of the WSJ for September 17, 2007. 8 (AR, at 0105.) September 2007 commencement of PSI investigation That same month—September 2007—the U.S. Senate Permanent Subcommittee on Investigations (“PSI”) “began its investigation into offshore dividend tax abuse . . . .” By that time the subcommittee had 7 (Doc. 112, paras. 2.2–.3 (CCSB and FwTC); Doc. 127, para. 2 (identifying CCSB as issue “L(x)” and FwTC as issue “K(y)”)). 8See generally Anita Raghavan, How Lehman Sold Plan To Sidestep Tax Man, Wall St. J., Sep. 17, 2007, https://www.wsj.com/articles/SB118998876153829237.  8 [*8] “a long history of examining offshore tax abuses”; and in this 2007 investigation into dividend tax abuse, the PSI issued more than a dozen subpoenas and conducted numerous interviews of financial institution executives, tax attorneys, hedge fund managers, and others. The Subcommittee has also consulted with experts in the areas of tax, securities, and international law. During the investigation, the Subcommittee reviewed hundreds of thousands of pages of documents, including trading data, financial records, presentations, correspondence, and electronic communications. Staff of S. Permanent Subcomm. on Investigations, 110th Cong., Dividend Tax Abuse: How Offshore Entities Dodge Taxes on U.S. Stock Dividends 2–3 (2008) (“PSI Report”), https://www.hsgac.senate.gov/ imo/media/doc/091108DividendTaxAbuse.pdf. 9 In October 2007 (a month after the PSI began its investigation) WB1 met with PSI members and provided them with “extensive documents obtained during [his] employment with the subject of the initial investigation [i.e., Institution 1].” (AR, at 0105.) Mr. Bialer does not allege that he ever met with PSI investigators. Mr. Bialer’s July 2008 meeting with WBO WBO personnel met with Mr. Bialer on July 14, 2008. (AR, at 0020–25.) The WBO’s handwritten notes taken at the meeting reflect “No names of off-shore entity” and “No names of people at banks”. (AR, at 0025.) PSI’s September 2008 report In September 2008 the PSI publicly released the 77-page PSI Report describing strategies used by numerous large commercial taxpayers to avoid withholding taxes on dividends. The PSI Report presented “Six Case Histories of Dividend Tax Abuse” concerning six financial institutions (including Institution 1, Institution 2, and Target). 9 The PSI Report cited interviews taken from November 1, 2007, see PSI Report at 55 n.216, through September 8, 2008, id. at 34 n.111, including two interviews of Target’s personnel on July 2 and August 21, 2008, id. at 36 n.123, 41 nn.145, 156, 157.  9 [*9] PSI Report at 22–69. 10 The strategies that the PSI reported were similar to the abuses described in Mr. Bialer’s Claim T, 11 and Mr. Bialer acknowledges (Doc. 127, at 2–3 & n.1) that the CCSB abuse he reported is reflected in the PSI Report (at 20), which “disclosed that Target avoided approximately $300 million of U.S. withholding taxes using CCSB” (Doc. 112, at 93). On October 2, 2008, after learning that the PSI was sharing this information with the IRS, WB1 12 “submitted a [second] claim for reward package consisting of Form 211, a six-page cover letter, and nine exhibits. The claim concerned the withholding tax schemes employed by all the taxpayers addressed in the Senate PSI Report”, Whistleblower 8391-18W, 161 T.C. at 61, i.e., including Mr. Bialer’s Target. WB1’s claim included taxpayer-specific records showing participation in the abuses detailed in the PSI Report. (AR, at 0007.) December 2008 transfer of information to audit teams In December 2008 LB&I forwarded the PSI Report and WB1’s information to various field examination teams, including Field Team 1114. The information forwarded did not include Mr. Bialer’s Claim T information. WB1’s forwarded information included taxpayer-specific records on ten taxpayers (including Mr. Bialer’s Target) relating to the dividend/withholding tax abuse investigation undertaken by the Senate PSI. Field Team 1114 already had Target’s corporate income tax returns 10 The PSI Report at 36–45, excerpted in AR, at 0033–44, discusses activities of Target based on information for which the report cites the following sources: (1) interviews with at least two employees of Target; (2) internal and external emails and memoranda to and from Target; and (3) Target’s September 6, 2005, “Presentation to Global Financing Products Group”. 11 To that effect, Mr. Bialer later asserted (AR, at 0002) that his Claims S and T had disclosed to the WBO all of the “Red Flags” of withholding tax abuse that were summarized in the PSI Report. Similarly, the audit team later generalized that Mr. Bialer’s reported issues were in the PSI Report. (AR, at 0007, 0104.) However, in this case Mr. Bialer has asserted that his Claim T identified an abuse—“FwTC” —that was not “mention[ed] . . . in the PSI report”. (Doc. 112, para. 2.3.) We do not see in the PSI Report a description of an abuse similar to FwTC, but the taxpayer (not Target but rather Mr. Bialer’s former employer, Institution 2) to whom Mr. Bialer apparently attributed the FwTC abuse in his pre-filing presentation (SAR, at 0016, second row), is one of the report’s principal subjects (see PSI Report at 69–74). 12 See supra note 2, explaining Mr. Bialer’s assertion and our assumption that WB1 is the petitioner in Whistleblower 8391-18W.  10 [*10] for 2004, 2005, and 2006, but they did not yet have Target’s Forms 1042 (withholding tax returns) under examination. (AR, at 0007.) Audit team’s receipt of Claim T in January 2010 As we noted above, in October 2007 the WBO forwarded Mr. Bialer’s Claim T to an SME in an IRS operating division (LB&I), but the SME did not immediately refer Claim T to an audit team. Rather, it was not until January 22, 2010, that the SME referred Claim T to Field Team 1114. The SME’s memorandum (AR, at 0028–31) gave to the audit personnel general instructions about the whistleblower process, including: The examiner must complete Form 11369, Confidential Evaluation Report on Claim for Award, to describe the value of the Information supplied by the whistleblower . . . . The form is designed to capture information about the whistleblower’s impact on case selection, planning and execution of an examination or investigation and the extent to which it assisted in the outcome of relevant issue(s). The examiner must thoroughly complete the form, including all necessary attachments and related explanations, so the Whistleblower Office can make the award decision, including the award percentage. . . . The Whistleblower Office is responsible for determining the award, if any, for all claims (Section 7623(a) and (b)). This January 2010 transmittal was the first time that the examination team saw Mr. Bialer’s information regarding Target. (AR, at 0007, 0082, 0107.) By this time Field Team 1114 had already had WB1’s information and the PSI Report for more than a year. The team reviewed Mr. Bialer’s Claim T but found its information unhelpful. As the team later 13 explained: “The information provided by the Whistleblower (‘WB’) was already under consideration and provided no additional 13 As is noted above, the audit team received Mr. Bialer’s information in January 2010. The explanation quoted here was an attachment to the audit team’s Form 11369, “Confidential Evaluation Report on Claim for Award”, dated December 16, 2013. (AR, at 0016–17.)  11 [*11] value. . . . This claim is of no value, and yielded nothing substantive that may be used during the current audit cycle.” Commencement of withholding tax audit in November 2010 In November 2010, Field Team 1114 opened Target’s 2005 Form 1042 withholding tax return for examination. (AR, at 0007.) As is noted above, the team observed that Target “was one of six financial entities mentioned in the [PSI] report and the information learned from that [Senate] investigation is what the [IRS] has focused on during the examination.” (AR, at 0017.) Field Team 1114 determined deficiencies against Target for the 2005 year based on failure to withhold taxes on dividends paid to its foreign-based clients from TRS transactions. Target agreed to the examination findings, paid the tax deficiency plus interest, and the examination for 2005 was closed in January 2012. (AR, at 0008.) In October 2012 Field Team 1114 opened for examination Target’s Form 1042 withholding tax returns for the 2006, 2007, and 2008 years. In June 2013 these examinations were transferred to Field Team 1197 and (on a date we cannot identify) were eventually all closed out as either “Survey” or “No Change”. (AR, at 0007–08.) The audit team prepared and transmitted to the WBO a Form 11369, “Confidential Evaluation Report on Claim for Award”, dated December 16, 2013. (AR, at 0010–12.) The team’s cover letter advised: A decision was made not to further or expand the scope of the current audit cycle (2006, 2007, and 2008) of this taxpayer [Target] with respect to assertions and/or information provided by the Whistleblower. The information has not been used by the IRS. The assertions made by the Whistleblower on the Form 211 were already under consideration as a result of using a standard audit and/or investigative approach and through the ordinary course of the audit through information document requests, the performance of a risk analysis, and information gleaned from the audits of other financial service entities. In addition, issues identified by the Service after the release of the 2008 PSI Report (Permanent Senate Subcommittee Investigation), addressing dividend tax withholding abuses by offshore entities, is the source used during the current audit cycle to address these concerns.  12 [*12] The information by this Whistleblower provided no additional audit value and no additional tax revenue, nor will in the future. (AR, at 0013.) An attached memorandum elaborated on this explanation as follows: The information provided by the Whistleblower (“WB”) was already under consideration and provided no additional value. . . . It is my opinion that this claim is poorly developed, lacks specifics, and is not particularly relevant as to the financial transactions examined by the Service during the current audit cycle. The Whistleblower provided several documents that address financial trades that occurred in 1997 and 1999. These years are closed and outside the statute of limitations. In the claim, the WB, Arthur Michael Bialer, provided some documents describing two financial trades, the first from as far back as 1999, and a second trade that did not specify a date but appears to have transpired as early as 1997. Both trades illustrated a notional principal contract or what is commonly referred to as a swap transaction coupled with a securities lending. Within the brief discussion by the WB addressing these trades there are gaps and inconsistencies with respect to the various steps and structure of both transactions based upon 1) what we since learned from the 2008 PSI (Permanent Senate Subcommittee investigation) Report, and 2) using a standard audit and/or investigative approach. There is little if any supporting documentation, for example, names of individuals, departments, general ledger information, journal entries, third party documents, and/or other pertinent data to identify and/or uncover tax avoidance by this taxpayer. . . . The information provided by the Whistleblower has not been used by the IRS, and will not be used during the current audit cycle. The assertions made by the WB in the Form 211 (which was not explicitly made clear) was already under consideration (for the current audit cycle) as a result of the issues identified by the Service from the 2008 report by the Senate’s Permanent Subcommittee on  13 [*13] investigations, titled “Dividend Tax Abuse: How Offshore Entities Dodge Taxes on U.S. Stock Dividends”. [Target] was one of six financial entities mentioned in the report and the information learned from that investigation is what the Service has focused on during the current audit cycle. The audit of the taxpayer’s financial transactions that may or may not have resulted in the under withholding of U.S. tax was brought to light by the Service in the ordinary course of their audit through information document requests, the performance of a risk analysis, and information gleaned from the audits of other financial service entities. The information provided by this WB provided no additional value and more precisely no additional tax revenue was or will be received because of or due to the information provided. This claim is of no value, and yielded nothing substantive that may be used during the current audit cycle. (AR, at 0016–17.) The audit team made this recommendation while the 2006–08 withholding tax examination was still ongoing (AR, at 0107 (“before the conclusion of the examinations”)), but those years were later “closed out either as Survey or No Change” (AR, at 0008). WBO evaluation of Claim T In 2016 a WBO staff member prepared a draft Award Recommendation Memorandum (“ARM”); 14 and another WBO staff member prepared a revised draft ARM dated February 14, 2019 (AR, 14 The 2016 draft ARM (AR 0104–08) was equivalent but not identical to the 2019 draft discussed below. The 2016 draft explained: “A decision was made by the exam team not to further or expand the scope of the audit cycle (2006–2008) which was in process when the whistleblower claim was submitted. The information [provided by Mr. Bialer] was not used by the IRS. The assertions made by the whistleblower were already under consideration . . . .” The supervisor who reviewed this earlier draft raised various questions and requested additions to the ARM, and the case was transferred to another staff member (the draftsman of the version dated February 14, 2019 (AR, at 0146–47)) to allow coordination with another claim submitted by “a different WB”. (AR, at 0081–82.)  14 [*14] at 0146–47), 15 and a Preliminary Denial Letter issued February 20, 2019 (AR, at 0005–06), which stated: The claim has been recommended for denial because the IRS identified the issue(s) prior to receipt/review of your information and your information did not substantially contribute to the actions taken by the IRS. The issue(s) you identified were already in the IRS audit plan for the taxpayer, and there were no changes in the IRS approach to the issue(s) after review of the information you provided. The preliminary denial letter gave Mr. Bialer 30 days to respond to the proposed denial, and he did so in a letter (AR, at 0002–04) dated March 15, 2019, that asserted: [I]t appears very likely that my Claims (but not my identity) had been conveyed by someone within the IRS to the [Senate] Subcommittee. If true, that would mean that Claim [T] was the proximate cause of the discovery of billions of dollars of tax avoidance. That is, Mr. Bialer asserted that even if the IRS did use the PSI Report rather than Mr. Bialer’s Claim T per se, the PSI Report itself was (he supposed) derived from his information, so that he was entitled to an award. Mr. Bialer’s response also stated more generally that “I felt as if I had been helping the IRS write a brand new audit plan that could be applied to all of the investment banks to ferret out the abuses that had led to ‘billions’ of dollars of unlawful tax avoidance.” (AR, at 0004.) After receiving Mr. Bialer’s letter, the staff member prepared a final ARM dated April 1, 2019, (AR, at 0007–09), that stated: Field Team 1197 stated none of the information provided by whistleblower BIALER was used by the IRS. The team states the assertions made by BIALER was already under consideration . . . as a result of the issues identified by the 15 Like the 2016 draft ARM, the 2019 revised draft proposed by check-box to “Deny” Claim T and stated, as its “Summary Basis for the Recommendation”: “The Service did not proceed based on the whistleblower information. The IRS identified the issue(s) prior to receipt/review of the whistleblower’s information and his information did not substantially contribute to the actions taken by the IRS.”  15 [*15] Service from the 2008 Senate PSI Report (via Whistleblower #1). It was the team’s opinion that BIALER’s claim was poorly developed, lacked specifics, and was not particularly relevant as to the financial transactions being examined. The only detailed information is from transactions that took place in 1997 and 1999. The statute of limitations (SOL) would have been expired by the time this information was reviewed. . . . A Preliminary Denial Letter was issued February 20, 2019. On March 20, 2019 the Whistleblower Office received the whistleblower BIALER’s written response to the PDL. The whistleblower surmises that he must have been responsible for the Senate initiating the Permanent Subcommittee on Investigations (PSI) into the TRS/dividend-withholding transactions which culminated with the 2008 Senate PSI Report. Therefore, the whistleblower argues he should be entitled to an award for all the proceeds the IRS may have collected based on the 2008 Senate PSI Report. It is true the 2008 PSI report concluded that various taxpayers may not have paid millions in dividend taxes as a result of certain dividend enhancement transactions. In October 2008, members of the PSI turned over taxpayer information obtained during the PSI hearings to the IRS and this information was subsequently provided to IRS- LB&I field personnel. However, whistleblower BIALER was not responsible for the Senate investigation. As was previously stated, another individual (Whistleblower #1) was the source that came forward and provided the Senate PSI with taxpayer information related to the TRS/dividend-withholding tax issues. WBO’s final determination letter Consistent with that recommendation, the WBO issued to Mr. Bialer a final determination letter dated April 5, 2019 (AR, at 0001), denying his application for an award under section 7623 for Claim T and stating in part:  16 [*16] The claim has been denied because the IRS identified the issue(s) prior to receipt/review of your information and your information did not substantially contribute to the actions taken by the IRS. The issue(s) you identified were already in the IRS audit plan for the taxpayer, and there were no changes in the IRS approach to the issue(s) after review of the information you provided. Tax Court proceedings Mr. Bialer filed his petition in the Tax Court on May 1, 2019, asking us to review the denial of Claim T. The Commissioner filed under seal the documents that he contended constitute the administrative record for Claim T and filed his first motion for summary judgment (Doc. 68). We issued an order (Doc. 110) denying the Commissioner’s first motion for summary judgment and granting in part Mr. Bialer’s motion (Doc. 83) to supplement the record; and the parties thereafter filed a supplemental administrative record (Doc. 115, “SAR”). In April and May 2024, Mr. Bialer filed three more motions (Docs. 162, 164, 167), asking us to further supplement the administrative record. 16 In this Opinion we resolve those motions to supplement. In July 2024 the Commissioner filed a second motion for summary judgment (Doc. 175), asserting that the WBO did not abuse its discretion in denying Mr. Bialer’s claim for an award derived from Target’s liabilities, because the IRS did not use Mr. Bialer’s information (but instead used information independently obtained from WB1 and the PSI Report) to determine Target’s liabilities. Mr. Bialer filed an eight-page response (Doc. 183) that makes no citation of the administrative record as filed and supplemented (Docs. 43, 115). 17 His response does not dispute the Commissioner’s factual statement, except 16 Mr. Bialer failed to file, with his motions to supplement, the documents that he asks us to add to the administrative record, and the motions do not indicate where in the Court’s record these documents are to be found. It appears that they are documents submitted by the Commissioner in Doc. 170, along with his opposition (Doc. 168) to the motions to supplement. 17 Mr. Bialer’s response (Doc. 183, paras. 2, 8) cites only “Doc. 172” in support of his factual assertions. Doc. 172 is Mr. Bialer’s reply in support of his three motions to supplement, and it alludes to documents that he proposes we should add to the administrative record. Mr. Bialer later filed a “Status Report” (Doc. 186), in which he alluded to the factual contentions in his response and made additional legal argument, but the status report did not cite or present additional factual support.  17 [*17] (1) to assert “that petitioner’s ‘claim for an award’ was not ‘denied’ by the WO” but “[i]nstead . . . by . . . the specific industry group [a Financial Services audit team] within LB&I responsible for the returns of the target taxpayer and affiliate identified by petitioner”, which group (he says) abused its discretion (Doc. 183, paras. 5–7), and (2) to assert that “Petitioner ‘brought to the Secretary’s attention’ (before anyone else) the presence of” the tax-avoidance at issue here (Doc. 183, para. 13). In this Opinion we resolve the Commissioner’s second motion for summary judgment. Discussion I. General whistleblower principles A. Whistleblower awards under section 7623 Section 7623 authorizes the IRS to pay an award to a person who provides information that yields the detection of underpayments of tax or other violations of the internal revenue laws. Section 7623(a) authorizes discretionary awards in certain circumstances, while section 7623(b)—which Mr. Bialer invokes here—provides for mandatory awards. Two prerequisites determine whether the WBO must issue an award under section 7623(b): The IRS (1) must have “proceed[ed] with any administrative or judicial action[18] . . . based on” the whistleblower’s information (the “action” requirement) and (2) must have collected “proceeds . . . as a result of the action” (the “proceeds” requirement). The regulation