Attorney General Bonta, Senator Allen, Unveil Legislation to Sharpen Tax Fraud Enforcement

Legislation to go after tax fraud, protect California communities 

OAKLAND — California Attorney General Rob Bonta and Senator Ben Allen (D-Santa Monica) today unveiled Senate Bill 799 (SB 799), legislation that would update California’s False Claims Act (CFCA) to give enforcement authorities the ability to fight tax fraud that harms California communities. Fraud and false claims against the government rob our communities of funding necessary to support essential public services, such as improving our schools, providing healthcare, increasing public safety, and fixing our roads. SB 799 seeks to aid the discovery and civil prosecution of hard-to-find cases of tax fraud by incentivizing whistleblowers to come forward and report egregious cases of fraud. The legislation also adds to the Attorney General’s and local prosecutors’ authority to hold those who commit tax fraud accountable. 

“Hardworking taxpayers pay into their state and local funds to protect critical public and social infrastructure like schools, healthcare, and our streets and roads. When powerful companies use their power to cheat our government, these taxpayers are also cheated,” said Attorney General Rob Bonta. “SB 799 would give my office, and local enforcement partners the ability to go after bad actors committing egregious cases of tax fraud and would provide added protections for the brave people who come forward and report these cases.”

“Bad actors who knowingly commit high-profile tax fraud have been robbing Californians of important services and updated infrastructure projects that benefit the public at large,” said Senator Ben Allen (D-Santa Monica), Author of SB 799. “SB 799 provides an important tool to better enforce against fraud and potentially recover hundreds of millions of dollars owed to our local governments.”

CFCA has been an effective tool at revealing, deterring, and punishing those who defraud the government of public funds. CFCA makes it unlawful to intentionally make false claims against the government, encourages whistleblowers to report fraud by providing a right to share in any recovery of money, and imposes triple the amount of damages and penalties on violators. While a helpful tool, currently, the CFCA does not apply to tax fraud.

SB 799 would strengthen tax enforcement in California, help uncover new cases of tax fraud and return more funding to defrauded communities by: 

• Granting the Attorney General and local prosecutors the authority to pursue tax fraud cases under the CFCA; and
• Providing whistleblowers with new protections from civil liability for disclosing internal company documents in breach of contractual obligations of confidentiality or taking other actions to provide evidence of false claims.

Full text of the legislation can be found here.