The federal False Claims Act (FCA) and its state counterparts are extremely successful in stopping fraud. Every year, these laws help the government recover billions of dollars that would otherwise be misspent—protecting taxpayers and ensuring the integrity of government contracting and healthcare programs.
One of the most common types of fraud is tax avoidance. At the federal level, whistleblowers play a strong role in ensuring everyone pays their fair share. Under the IRS Whistleblower Program, a whistleblower can receive an award of 15% to 30% of proceeds collected if the whistleblower’s information leads to a successful enforcement action. The IRS Whistleblower Office has collected over $5.7 billion in unpaid taxes and awarded nearly $1 billion to whistleblowers.
However, whistleblowers are often disappointed that they lack similar tools to combat tax fraud at the state level. Only a handful of state FCAs permit whistleblowers to report the underpayment or nonpayment of taxes. Illinois, Indiana, and Rhode Island all permit whistleblowers to report tax fraud, but the gold standard is New York, which has a broader statute and a history of aggressive enforcement.
Fortunately, the District of Columbia recently amended its FCA to add a provision mirroring the New York FCA. The new law permits whistleblowers to report the underpayment of taxes against companies or individuals with over $1 million in taxable income per year and where the unpaid tax bill totals at least $350,000.
According to Baron & Budd attorney Noah Rich, “this new provision is undoubtedly a win for law-abiding taxpayers. When people and companies don’t pay the taxes they owe, it leaves less money for essential government services and places more of a burden on the rest of us. This new law signals that the District of Columbia is serious about catching tax cheats.”
The District of Columbia’s new law provides a strong incentive for whistleblowers to report tax fraud. A whistleblower is entitled to receive 15% to 30% of the amount the government recovers in a successful enforcement action. If you have evidence that a person or company is committing tax fraud, an experienced whistleblower attorney can help you file an effective complaint and maximize your share of any recovery.
With more than 30 years of experience, the attorneys on Baron & Budd’s whistleblower representation team have represented dozens of clients in government fraud cases returning over $5.4 billion to federal and state agencies, with whistleblower recovery shares as high as 49%. They are ready to help if you have evidence of tax fraud.
Please call (866) 401-5971 or complete our contact form if you would like more information. For more information, see What You Need to Know About Becoming a Whistleblower. Please understand that contacting us does not mean that you have established an attorney-client relationship with Baron & Budd, P.C.