Washington, D.C. Passes Tax Fraud Qui Tam Statute

On January 13, Mayor Muriel Bowser of Washington, D.C. signed into law the False Claims Amendment Act of 2020. It will become effective as soon as the 30-day congressional review period passes, as it is expected to do.

The amendment passed 12-1, and featured four major changes to the district’s existing false claims statute:

  1. The new law removed a previously enforced ban on whistleblowers’ ability to file tax fraud claims. Now anyone aware of tax fraud by any person or company with income, profits or sales of more than $1 million annually can file a complaint under the statute, if there was at least $350,000 in damages at stake.
  2. The amendment sets the standard for tax fraud violations “knowingly,” which is consistent with other provisions of D.C.’s False Claims Statute.
  3. The amendment increases possible whistleblower awards from 10 percent to 30 percent of the amount of money recovered by the D.C. government from enforcement actions related to the case.
  4. The amendment allows for recovery from tax fraud going back up to 10 years, and that is retroactive. This means whistleblowers can come forward with their information and qui tam cases now, even if the alleged conduct occurred a decade ago.

The statute also includes protections for confidential taxpayer information by limiting disclosure of sensitive information.

The federal False Claims Act does not allow for tax claims, so a variety of states have created their own special tax fraud qui tam rules. The states with the broadest qui tam statues for tax fraud are New York and Illinois, but there are similar rules in place in Delaware, Florida, Indiana, Nevada and Rhode Island.

For more information about state qui tam rules versus federal ones, contact an experienced whistleblower attorney at Kardell Law Group.