Background
William Scott filed a Form two thousand eleven application for a whistleblower award with the Internal Revenue Service. The IRS denied the claim, stating the information provided did not result in any collected proceeds. Scott sued the Commissioner of the IRS in the Southern District of Florida, seeking an injunction to force an investigation. The district court dismissed the complaint, citing sovereign immunity and the Eleventh Circuit’s prior decision in Stone versus Commissioner.
The court’s reasoning
The court reviewed the dismissal de novo and found that judicial review under the Administrative Procedure Act is inappropriate when agency action is committed to agency discretion by law. The court relied on its precedent in Stone versus Commissioner, which held that the IRS’s decision regarding whistleblower claims is discretionary. The court also addressed the recusal argument, noting that a party must demonstrate personal, extrajudicial bias rather than disagreement with judicial philosophy or systemic bias.
What it means going forward
The ruling reinforces that individuals cannot compel the IRS to investigate taxpayers or award whistleblower bonuses through the courts, as these decisions remain within the agency’s exclusive discretion.