Golden State Today

California Attorney General Rob Bonta and Senator Ben Allen have introduced a new legislative proposal, Senate Bill 799 (SB 799), aimed at enhancing tax fraud enforcement under the state's False Claims Act (CFCA). The announcement, made in Oakland, highlights the need to combat fraud that deprives communities of essential public services. Among these are education, healthcare, and infrastructure development.

SB 799 is designed to facilitate the detection and civil prosecution of difficult-to-find tax fraud cases by encouraging whistleblowers to report severe instances of fraud. The proposed legislation expands the authority of the Attorney General and local prosecutors to hold offenders 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," stated 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."

Senator Ben Allen, the author of SB 799, emphasized the impact of tax fraud on public services and infrastructure. "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 said. "SB 799 provides an important tool to better enforce against fraud and potentially recover hundreds of millions of dollars owed to our local governments."

The CFCA has historically been a tool in exposing and penalizing those who defraud the government of public funds. It prohibits making false claims against the government, incentivizes fraud reporting by allowing whistleblowers to share in monetary recoveries, and imposes substantial damages and penalties on violators. Presently, CFCA does not cover tax fraud.

If enacted, SB 799 would bolster tax enforcement in California by granting prosecutors the authority to handle tax fraud cases under the CFCA, and by providing whistleblowers new protections from civil liability for sharing internal documents or otherwise proving false claims. The full text of SB 799 is available for public review.