D.C. Councilmember Mary Cheh introduces whistleblower bill to curb tax evasion
Yesterday, District of Columbia Councilmember Mary Cheh introduced the "False Claims Act of 2013," which will amend the D.C. False Claims Act to permit whistleblowers to bring tax-related fraud claims. If enacted into law, the bill would permit whistleblowers to seek a qui tam or relator’s share when the amount of uncollected tax is worth $350,000 or more, and brought against taxpayers who have an income above $1 million.
Councilmember Cheh stated in her press release:
Under current District law, the False Claims Act does not apply to violations of the tax code. Therefore, the District cannot obtain information from whistleblowers that may be relevant to the investigation and prosecution of tax evaders. This bill would allow the District to use the tools of the False Claims Act against the District’s biggest tax evaders in a manner already authorized for other applications of the Act.
Under this bill, whistleblowers would be eligible to receive a reward for providing information that helps the District collect money that it is owed. As with all other applications of the False Claims Act, the whistleblower would only be eligible for a reward if the District recovered money from the tax evader, the recovery was based in part on information supplied by the whistleblower, and the supplied information was non-public information that the government did not already have. Thus, people with information that could actually help the government would have an incentive to come forward, but those who just have a hunch or hold a grudge would not.
A copy of the press release can be found here, and a copy of the bill introduced today can be found here.
“Amending the D.C. False Claims Act to permit whistleblowers to collect a reward for reporting major tax frauds will greatly enhance efforts to combat tax fraud and protect honest taxpayers,” said Stephen Kohn, President of the National Whistleblowers Center, and one of the attorneys who represented Bradley Birkenfeld, who blew the whistle on major off-shore tax fraud by the Swiss bank UBS, resulting in the collection of billions of dollars in unpaid taxes by US taxpayers.
“We hope the D.C. Council will move swiftly to enact this bill into law,” he added. “This one small change in the law has the potential to help honest taxpayers by making sure that the D.C. government collects what is owed by high income tax evaders.”
If the “False Claims Act of 2013” is passed the District of Columbia will join New York which is currently the only state with a False Claims Act statute that permits qui tam recoveries for reporting major tax frauds.
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