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What Maryland can Learn from the IRS on the State’s New Tax Program: Ari Yampolsky and Michael Ronickher in the Washington Post

Posted  July 13, 2021

Opening with the warning “tax cheats beware,” Constantine Cannon whistleblower attorneys Ari Yampolsky and Michael Ronickher published an opinion piece in the Washington Post detailing the provisions of Maryland’s new tax whistleblower reward program, which covers state and county tax fraud and underpayments.

While New York has long allowed whistleblowers to use its state False Claims Act to bring tax claims, and the District of Columbia has recently done the same, Maryland chose a different model.  Maryland’s new program, which the state comptroller’s office will run, is modeled on the IRS Whistleblower Program. It promises qualified whistleblowers 15 to 30 percent of what Maryland recovers, as well as protections from retaliation.

As Ari and Mike write, Maryland lawmakers wisely recognized that whistleblowers are critical supplements to state tax enforcement efforts.  However successful the IRS Whistleblower Program has been, it also offers lesson for Maryland.  As detailed in the piece:

  • The Maryland program should strive for transparency, including through communication with whistleblowers: “As any rom-com can teach, failure to have a 10-minute conversation can lead to years of frustration.”
  • In recognition of the risks that whistleblowers take, the Maryland program should stive for predictability, including in timelines and process.
  • The program should stive for efficiency and offer timely rewards to whistleblowers.
  • Maryland should ensure that it has adequate resources to pursue whistleblower tips and enforce tax laws. Without qui tam provisions that allow a whistleblower to file suit on the government’s behalf, bringing private resources to contribute to tax investigations, ample government funding of enforcement is critical.

As the piece concludes, the new Maryland program is good news.  Tax fraud victimizes everyone who pays taxes honestly and relies on government services such as education, health care and public safety. To secure the benefits of the new program, Maryland can learn important lessons from the success, and pitfalls, of the IRS Whistleblower Program.

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Tagged in: CC Lawyers, FCA State, Importance of Whistleblowers, IRS Whistleblower Reward Program, Legislation and Regulation News, Tax Fraud,