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| Important Information About Compensation for Reporting Sales Tax Fraud |
When most people think of sales taxes the first thing that comes to mind is probably not a good school for their children, the fire station in their neighborhood, or the snow plow that clears the streets in the winter, but sales taxes pay for all of those vital services and more. In fact, sales taxes are one of the most important sources of revenue for the state and local governments. Unfortunately, sales taxes are also one of the easiest areas for tax cheats to avoid paying their fair share. The sales tax system relies heavily on sellers to be diligent and truthful about their sales, and there are relatively few cross-checks available for the government to know when sellers are underreporting.
Whistleblowers are a vital source of information to help identify sales tax fraud. Many state and local governments provide financial incentives to whistleblowers who come forward to report tax fraud. The biggest rewards, and the best way to ensure that the government pays the whistleblower when it benefits from the information, is to file a suit under state or local False Claims Act laws. These suits entitle to a hefty portion (between 15% - 30%) of all monies that the government can recover from the tax cheats. Many successful fraud whistleblowers have received awards of millions of dollars in false claims act cases, and the average compensation exceeds $300,000.
To take advantage of the rewards, you must file a false claims act lawsuit. We can help. Loevy & Loevy represents our clients on contingency, meaning that you do not have to pay us out of pocket and you owe us nothing unless you receive compensation through your lawsuit.
Examples of sales tax fraud by sellers include:
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Understating the actual sales totals
Selling items “off the books” so that the sales are not reflected in actual sales totals
Failing to report sales of items shipped out of state when the seller has a business presence in the state where the delivery occurs.
Falsifying documentation to indicate that items were shipped out of state when, in fact, they were delivered in the state where the sale occurs.
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Although sales tax fraud is usually committed by sellers, sometimes a buyer is responsible to remit the sales tax to the government. For example, when a company buys a big ticket item out of state it may have to pay sales tax in the state where it is incorporated or where it is using the item. If you are aware of a company neglecting to pay sales tax on the purchase of big ticket items, you may be eligible to file a false claims act suit.
If you are aware of sales tax fraud and want to learn more about your rights, please call us toll free at 1-866-914-4221 or e-mail us at whistleblower@loevy.com.
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