In This Issue:
A Decade of Lessons Learned from State Tax False Claims Act Cases; Second Circuit Reaffirms Taxpayer’s Use of Protective Refund Claims; and Challenging Regulations After Mayo and Home Concrete.
Excerpt from A Decade of Lessons Learned from State Tax False Claims Act Cases -
The last decade has witnessed a large upswing of False Claims Act (FCA) cases filed in the state tax arena. New York, particularly in the last few years with Attorney General Eric Schneiderman at the helm, has sharpened its tools and upped its enforcement efforts. The New York False Claims Act was amended in 2010 to allow private citizens acting on behalf of the state to bring a tax claim alleging fraud against taxpayers who met a certain financial threshold. The amendments provide for treble damages, rewards of up to 30 percent of liability and a 10-year statute of limitations, which is years beyond the statute of limitations governing state tax audits. In Illinois, hundreds of state tax FCA cases have been filed by a single plaintiff law firm, triggering a State House Revenue and Finance Committee hearing on the abuse of the Illinois FCA, as well as proposed legislation that would put significant limitations on the filing of such claims. Across the United States, unclaimed property laws also have seen their fair share of FCA litigation.
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