California Attorney General Rob Bonta and Senator Ben Allen from Santa Monica have presented new legislation aimed at enhancing the state's fight against tax fraud. Titled Senate Bill 799 (SB 799), the proposal aims to update California’s False Claims Act (CFCA) to include measures specifically targeting tax fraud. This initiative intends to safeguard California communities by improving the ability of authorities to identify and prosecute tax fraud cases that harm public services.
Attorney General Bonta emphasized the impact of fraud on essential services, stating, “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.” He further described how SB 799 would bolster the efforts of his office and local enforcement agencies against "egregious cases of tax fraud" while offering protections for whistleblowers.
Senator Ben Allen, the author of SB 799, also highlighted the damage caused by tax fraud, noting, “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.” He underlined the bill’s potential to increase enforcement against fraud and help recover funds for local governments.
Historically, the CFCA has played a vital role in the detection and punishment of those who defraud the government. The Act penalizes false claims against the government and incentivizes whistleblowers by allowing them to share in recovered funds. However, until now, tax fraud has remained outside its scope.
The proposed SB 799 aims to change this by granting the Attorney General and local prosecutors authority under the CFCA to tackle tax fraud. Additionally, the bill seeks to protect whistleblowers from civil liabilities arising from disclosing confidential company documents to reveal fraudulent activities.
For further details, interested parties can access the full text of the legislation.