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A bill is currently under discussion in California which has got financial experts taking note. Speaking to The American, US Tax expert Jan Allen explained that "This proposed bill extends the CFCA (California False Claims Acts) to apply to cases of tax fraud. It is essentially a whistleblower statute which encourages employees, contractors or agents who may have information relating to their employers or others’ fraudulent activity to report it to the state. Damages to the state must exceed $200,000 and the annual income of the person that made the false claim exceeds $500,000 for any taxable year. So this clearly only applies to wealthy fraudsters."
Why is this bill coming into play now? Jan says that "The state believes that there is a tax gap in California, the difference between what taxpayers owe and what the state takes in. Estimates to date believe that difference is approximately $20 billion. So the effect to taxpayers overseas is if someone contacts California and says they are cheating on their taxes."
What could that effect be? "Likely impact on Califorian’s living overseas, not much, unless they are uber wealthy and cheating on their taxes. Impact though is that it legitimizes “whistleblowers” who may or may not have a valid claim....so if someone decides to create havoc, they certainly could if this bill passes."
So the bill isn't something to be too worried about, but is worth being aware of.
If you have any questions about the CFCA, Allen Barron Inc., based in California, can be reached via allenbarron.com