California bill to allow citizens to be sued for mitigating tax

Pedro Gonçalves
clock • 2 min read

California is debating a bill that will allow the Attorney General and private attorneys to sue taxpayers who have mitigated their tax liabilities by lawful behavior. AB 1270, introduced by assembly member Mark Stone earlier this year and passed by the Assembly in late May, removes the "tax bar" from the state's False Claims Act (CFCA),  allowing attorneys to sue taxpayers for perceived tax errors. Other states have False Claims Acts but they explicitly prohibit FCA litigation in the tax context, because of the risk of abuse by "bounty hunters" or the state itself. With its declare...

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