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Tax whistleblower lawsuits may be coming in vogue

| Feb 25, 2020 | Whistleblowers |

Taxes are a big part of business going smoothly in Michigan and the rest of the United States. Retailers often struggle to work out the right taxation for sales in various areas, and this has gotten ever more complicated since retail doesn’t just happen where the companies are based.

The issue of economic nexus has given some clarity to this messy situation, as the Supreme Court recently ruled on a specific case that helps build this standard. The ruling allows states to impose taxation on companies based outside the state and which may have no physical presence there. The new test is the taxes that the government could charge based on their minimum requirements for an economic nexus. This may be simply the residency of a purchaser.

Some of these tax laws may be enforced in part by whistleblowers, as a specific type of lawsuit governs attempted tax avoidance. Qui tam lawsuits are cases in which a person with evidence of fraud or similar violations have the right to sue on behalf of the government. Successful qui tam cases may entitle the plaintiff to a portion of the recovered amount.

As a result, companies must think of how to defend themselves against a potentially lucrative form of whistleblowing. And people with evidence of tax avoidance may be able to see a reward for their vigilance.

Anyone with a potential whistleblower case against a company or organization engaging in fraud may consult the help of an attorney. Legal representation can help protect people from retaliation and other risks involved in whistleblower cases.

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