Telecommunications giant Sprint recently agreed to settle a long-running whistleblower lawsuit regarding incidents of tax fraud to the tune of $330 million. The lawsuit alleged Sprint had been committing tax fraud since 2005.
It is not the greatest timing for Sprint, which is currently going through the approval process for a merger with T-Mobile. The merger was approved by a national security panel in late December, but the carriers still need Federal Communications Commission approval, along with approval from the U.S. Department of Justice. The merger has been broadly criticized, and the result of this settlement will not help Sprint’s image as it goes through a highly public process.
Failure to collect local and sales taxes
The whistleblower in the case first brought forth the allegations against Sprint in 2011. The U.S. Office of the Attorney General joined the case in 2012, as it filed a superseding complaint that included allegations that Sprint purposefully under-collected and underpaid millions of dollars in state and local sales tax on flat-rate wireless plans dating back to 2005. This was the first ever tax enforcement action filed under New York’s False Claims Act, which was changed to allow tax claims in 2010.
This is a landmark case for both New York and federal law in several regards. It is the largest recovery a single state has ever made in an action brought under the state’s own False Claims Act — not just in New York, but in any state in the country.
To learn more about the steps you must follow if you are to file a claim against a business or organization under the False Claims Act, meet with an experienced whistleblower attorney at the Kardell Law Group.