AB 1270 (M. Stone; D-Scotts Valley) expands the False Claims Act (FCA) to allow the Attorney General and private attorneys to sue taxpayers for perceived tax errors, thereby creating inconsistent tax enforcement, litigation, and nuisance lawsuits for taxpayers.
AB 1270 is being presented as a means to combat tax fraud, but it is a solution in search of a problem. The CalChamber is unaware of any reporting of rampant tax fraud in California that would justify new tools such as the FCA being utilized and which would potentially provide additional income if FCA lawsuits could be brought.
Unsurprisingly, present fiscal analysis of AB 1270 has not identified any estimated increase in revenue to California from expanding the FCA to allow tax-related lawsuits. Moreover, California already applies civil and criminal liability for fraud under the California Revenue and Tax Code Section 19706 (tax fraud) and Penal Code Section 72 (false statement to public entities may constitute a felony). Read More