Overview
(October 6, 2025, Washington, DC) — Steptoe won a significant appellate victory on behalf of a whistleblower client in In re: Sealed Case, No. 24-1001, before the U.S. Court of Appeals for the District of Columbia Circuit. The court vacated a 2023 US Tax Court decision that had improperly reduced the whistleblower’s award for exposing a complex tax evasion scheme.
The whistleblower, represented by Steptoe, had previously received multiple maximum awards of 30% from the IRS Whistleblower Office (WBO) for his role in uncovering dividend withholding tax abuses. However, for one case—despite contributing critical information that led to the recovery of $88 million in unpaid taxes, the WBO awarded only 22% of the proceeds, citing a pre-existing audit of the taxpayer. The DC Circuit found this justification "clearly erroneous," concluding that the IRS had not independently discovered the specific violations and that the whistleblower’s contributions were essential to the agency's enforcement efforts. Steptoe partner, Jason Wright, in a comment to Law360 article about the case, stated that "[t]his ruling makes clear that the IRS must justify its award decisions with evidence, not assumption."
The appellate decision not only vindicates the whistleblower’s efforts but also sets a precedent for how courts should scrutinize administrative records in whistleblower cases. The matter has been remanded for further proceedings, and the whistleblower now stands to receive an additional $7 million.
Jason Wright and Michel Paradis represented the whistleblower.
About Steptoe
In more than 110 years of practice, Steptoe has earned an international reputation for vigorous representation of clients before governmental agencies, successful advocacy in litigation and arbitration, and creative and practical advice in structuring business transactions. Steptoe has more than 500 lawyers and other professional staff across offices in Beijing, Brussels, Chicago, Hong Kong, Houston, London, Los Angeles, New York, San Francisco, and Washington, DC. For more information, visit www.steptoe.com.
