Promote Financial Accountability With Our State Tax Fraud Attorneys

State tax fraud and tax avoidance disrupt fair competition and negatively impact communities. For those who uncover such misconduct, stepping forward as a whistleblower can feel daunting—but it is also a crucial step in promoting accountability and justice.

• Many states have programs that allow whistleblowers to report tax fraud or avoidance and share in the government’s recovery.
• Types of state tax fraud or avoidance include failing to report state sales taxes, creating illegal tax shelters to evade taxes, and hiding or failing to report income.
• Insiders and tax experts are crucial in identifying concealed assets and undetectable tax fraud schemes, though anyone with information about state tax law violations can file a case, even an outsider.
• Most state False Claims Acts protect whistleblowers from employer retaliation.

At Whistleblower Partners LLP, we are dedicated to supporting individuals who expose state tax fraud or avoidance, offering skilled legal guidance and protection. We empower whistleblowers to make a difference while safeguarding their rights and well-being.

Understanding Whistleblower Programs for State Tax Fraud

Several states have enacted reward programs for tax whistleblowers. Maryland has a tax whistleblower tip program modeled on the IRS Whistleblower Program, while New York, the District of Columbia, and Illinois allow tax whistleblower lawsuits under their state False Claims Acts. These statutes authorize whistleblowers to file lawsuits on behalf of the state to recover fraudulently unpaid taxes and then share in the government’s recovery. These laws are designed to incentivize whistleblowers to report tax underpayments at the state level.

What Kinds of State Tax Frauds and Tax Avoidance Can Whistleblowers Report?

Under state False Claims Acts, as well as the Maryland tip program, whistleblowers can report a wide variety of tax frauds by corporations and individuals:

• Failing to report state sales taxes.
• Illegal tax shelters created for the sole purpose of evading taxes. Common examples include fictitious retirement plans, abuse of tax-exempt organizations, and improper stock and deferred compensation agreements.
• Hiding income using offshore tax havens, shell companies, and trusts.
• Failing to report earnings from cryptocurrency transactions.

Whistleblowers play an essential role in shutting down these schemes. From the outside looking in, it is often impossible to tell when a company is concealing assets or failing to report income. Insiders play a critical role in identifying otherwise undetectable frauds or tax evasion. Outside tax experts can also become whistleblowers by detecting tax evasion through complex analysis.

Who Can Blow the Whistle on State Tax Fraud and Evasion?

Almost anyone with information about a violation of a state’s tax laws can report the misconduct. Even employees in senior roles or with compliance functions are eligible in most cases. But you do not need to be an employee of the company engaging in misconduct to qualify as a whistleblower. For a more detailed overview of the requirements, read our State False Claims Act page.

How Do States Help Protect Whistleblowers?

Generally, state False Claims Acts provide protections from employer retaliation, including firing, demoting, suspending, threatening, harassing, or discriminating against whistleblowers who file a state False Claims Act case. Individuals who are retaliated against for their whistleblowing can often sue for reinstatement, back pay, and other damages. These protections can apply whether or not a whistleblower’s case is ultimately successful, as long as the whistleblower has a reasonable belief that a violation occurred.