In a rapidly escalating matter of concern to all District business taxpayers, the D.C. Council again will consider B23-35, the D.C. False Claims Amendment Act of 2020, which would expand the D.C. False Claims Act to tax matters above specified thresholds. The Council will review the committee mark-up tomorrow, November 17th. First reading would likely occur later in the day and, if approved, second (and final) reading could then occur during the first week of December. The bill would then be sent to the Mayor for consideration. The Council considered the bill early this year, but it faded from attention as COVID emerged.

The prior draft committee print barred application of the D.C. False Claims Act to tax matters unless: (1) the defendant’s District taxable income, District sales, or District revenue was at least $1 million for any of the taxable years subject to the action; and (2) the damages pleaded totaled at least $350,000. Taxpayers that exceed those thresholds, and ultimately found to have violated the Act, would then be subject to treble damages if B23-35 were adopted. Current District law excludes from the Act, “claims, records, or statements made pursuant to those portions of Title 47 of the District of Columbia Official Code that refer or relate to taxation.” D.C. Code Ann. § 2-381.02.

For more information about combating this False Claims Act expansion, please contact the Eversheds Sutherland SALT Team.