Tax Court in Brief | Berenblatt v. Comm’r | Whistleblower Administrative Record and Grand Jury Secrecy
Berenblatt v. Commissioner, T.C. Memo. 2026-75 (Corrected) | Filed August 27, 2026; corrected opinion served September 9, 2026 | Copeland, J. | Docket No. 7208-17W
Short Summary
The taxpayer traded foreign exchange. In 2000, he was solicited to invest in a digital-options tax shelter, funded an account, studied the mechanics, concluded that the payout would never materialize because the bank intermediary controlled the trade and its pricing, and defunded the account. In late 2007, IRS Criminal Investigation interviewed him in connection with a grand jury proceeding, one of more than a hundred interviews in an investigation already two years underway. He produced no documents and never testified at either criminal trial.
In 2015, Berenblatt filed a Form 211 claiming that his interview gave the government the economic substance doctrine and reversed the course of the shelter prosecutions. The Whistleblower Office reviewed his claim, obtained a Form 11369 from the interviewing special agent stating that Berenblatt supplied no new information, and denied the claim, finally on March 2, 2017. He petitioned this Court on March 30, 2017. This opinion resolves three motions he filed years into that litigation: to supplement the administrative record, for in camera review of grand jury materials, and to take judicial notice of 14 proposed adjudicative facts. The Court denied all three.
Key Issues
Whether documents gathered in discovery, created after the agency’s decision, or drawn from a criminal trial record may supplement a whistleblower administrative record. Whether this Court should review grand jury materials in camera to assess objections under Rule 6(e) of the Federal Rules of Criminal Procedure and section 6103. And whether judicial notice may supply adjudicative facts that the record rule would otherwise keep out.
Primary Holdings
Supplementation requires a showing that the proposed documents fall within one of the three categories of City of Dania Beach v. FAA, 628 F.3d 581, 590 (D.C. Cir. 2010). Berenblatt made no such showing. Access to grand jury materials, even in camera, is governed by Rule 6(e), and the judicial-proceeding exception wouldn’t have permitted the Whistleblower Office or this Court to reach them; absent a particularized need under United States v. Procter & Gamble Co., 356 U.S. 677 (1958), the Court declined to conduct in camera review. Judicial notice in a record rule case must satisfy the same City of Dania Beach standard, and Berenblatt’s 14 requested facts did not.
Key Points of Law
An administrative record may be expanded in two distinct ways: by completing it with material that should have been included but was left out, or by supplementing it with extra-record evidence never before before the agency. Van Bemmelen v. Commissioner, 155 T.C. 64, 73 (2020). Supplementation is the exception, not the rule. Id. at 76. The agency is presumed to have properly designated the record, and the moving party must present concrete evidence that the documents were actually before the decision-makers. Id. at 74–75.
Treasury Regulation section 301.7623-3(e) lists what a whistleblower administrative claim file always includes, and it sets a floor rather than a ceiling. Estate of Insinga v. Commissioner, 149 F.4th 709, 725 (D.C. Cir. 2025). Documents that are material, part of the history of decision-making or of key stages of the IRS proceedings, or that contradict the office’s conclusion belong in the record. Id. at 723.
The Court declined to narrow “recorded interviews” in Treasury Regulation section 301.7623-3(e)(2)(ii) to post-Form 211 taint debriefings, holding that regulations are read as statutes are and that plain text ends the inquiry. Guardian Industries Corp. v. Commissioner, 143 T.C. 1, 12 (2014); Robinson v. Shell Oil Co., 519 U.S. 337, 340 (1997). The Court also treated an interview recorded in handwritten notes as a recorded interview.
And reviewing courts should have before them neither more nor less information than the agency had. New LifeCare Hospitals of North Carolina, LLC v. Becerra, 7 F.4th 1215, 1224 (D.C. Cir. 2021). The background-information exception generally applies only to material explaining complex technical issues outside a court’s usual purview or clarifying information already before the agency; it isn’t a catchall.
A Whistleblower Office investigation is not preliminary to or in connection with a judicial proceeding, so Rule 6(e)(3)(E)(i) wouldn’t have opened grand jury material to it. United States v. Baggot, 463 U.S. 476 (1983). A particularized need means the materials are needed to avoid a possible injustice in another proceeding, that the need outweighs continued secrecy, and that the request is structured to cover only what is needed. United States v. Sells Engineering, Inc., 463 U.S. 418, 443 (1983), quoting Douglas Oil Co. v. Petrol Stops Northwest, 441 U.S. 211, 222 (1979). United States v. Zolin, 491 U.S. 554 (1989), which governs the crime-fraud exception to attorney-client privilege, doesn’t supply the standard for grand jury material.
Judicial notice reaches adjudicative facts not subject to reasonable dispute. Fed. R. Evid. 201; Petzoldt v. Commissioner, 92 T.C. 661, 674 (1989). As to other proceedings, it is typically limited to procedural facts such as the docket number, the judge, counsel of record, and the text of an opinion. Id. at 674–75. Grand jury proceedings are different in kind and aren’t part of the public record.
Insight
Whistleblower practice lives or dies on the Form 211, and this opinion is the clearest statement yet of why. Berenblatt filed his claim seven years after the interview he built it around, by which time the investigation had long since produced a $76 million penalty from one target and a $456 million deferred-prosecution agreement involving another. The Whistleblower Office asked the interviewing agent what Berenblatt contributed; the agent said nothing new, and that answer became the record. Nine years and three motions later, it still is.
But the practical instruction is simple enough: put everything into the submission. Berenblatt’s own client binder and questionnaire were in his possession the entire time and could have gone in with the Form 211; because they didn’t, they were extra-record documents with no path back in. Documents created during the Tax Court litigation were worse off still, since they didn’t exist when the office decided. A whistleblower who holds material back for a rainy day is holding it back permanently.
And he did win something on the way down that will outlast his case. The Commissioner tried to read the regulation’s reference to recorded interviews as covering only taint debriefings held after a Form 211 is filed, relying on the Internal Revenue Manual. The Court refused to add a limitation Treasury didn’t write and confirmed that written notes count as a recording. Future claimants seeking their own debriefing notes now have a published holding to point at, which is a better outcome than most losing motions produce. That reading runs in the same direction as Whistleblower 972-17W.
The grand jury holding deserves its own note, because it’s structural rather than discretionary. The Court reasoned from what the Whistleblower Office could have seen, not from what the Court might find interesting. Since Baggot keeps a civil award investigation outside Rule 6(e)(3)(E)(i), grand jury material could never have been part of that administrative file, so in camera review would serve no purpose. Asking a court to sample 800 boxes without naming the evidence you expect to find gets the label the Court gave it here: a fishing expedition. Background on the program is available in our overview of the IRS Whistleblower Program, in insight on filing a claim from the office’s director, and from the IRS Whistleblower Office itself.
More weekly coverage is collected in The Tax Court in Brief, and the opinion is available through the Court’s opinion search. Freeman Law’s Tax Court litigation attorneys handle whistleblower claims and the record-rule litigation that follows a denial.
The information in this article is for general educational purposes only and is not legal advice. Reading it does not create an attorney-client relationship with Freeman Law. Every matter turns on its own facts, and you should consult a qualified tax attorney about your circumstances.
