Friday, August 07, 2015
HMB's Jordan Goodman Quoted by Bloomberg BNA on the Ongoing
Illinois Qui Tam Law Suit Drama
"California Wineries Demand Illinois Halt Abusive Tax
Three California wine vendors have
filed suit against the Illinois Department of Revenue and Office of
the Attorney General demanding the agencies halt a pattern of
abusive whistle-blower actions involving the payment of use taxes
on Internet-based wine sales (Chimney Rock Winery LLC v. Beard,
Ill. Cir. Ct., No. 2015-L-050552, complaint filed, 7/28/15).
The wineries, together with the San
Francisco-based Wine Institute, filed suit July 28 in Cook County
Circuit Court seeking an order enjoining the attorney general and
IDOR from authorizing prosecutions under the Illinois False Claims
Act (IFCA) in violation of state and federal law.
The plaintiffs further called on the court to order the IDOR to
use authorities under Illinois' Taxpayers' Bill of Rights to abate
use tax payments that they believe are "coerced" through the
whistle-blower or "qui tam" process on tax positions that conflict
with the department's own regulations.
"The suit filed by the Wine
Institute is a clever and hopefully successful alternative to
ridding the Illinois courts of the nuisance qui tam law suits,"
M. Goodman, a tax partner with Horwood Marcus &
Berk in Chicago. "Unfortunately, this suit was born
from the frustration of hundreds of litigants trapped by the
aggressive positions taken by the relator and the failure of the
legislature and the attorney general's office to nip these types of
lawsuits in the bud."
...Goodman, who has supported a
Multistate Tax Commission effort addressing flaws in state
whistle-blower laws, said the court may have to determine whether a
"reasonableness test" should be established for sellers seeking to
demonstrate that purchasers had the option of taking delivery of
the wine at the seller's location.
Goodman said the suit suggests a failure on the part of the state
to administer its tax laws in a clear and consistent manner.
"The fact that this suit was even filed is unfortunate," Goodman
said. "It shows that the legislative process to correct the use of
qui tam acts in Illinois is a failure. It also highlights that the
role of the attorney general in such suits in Illinois is
misplaced. The decision to pursue these types of questions should
be with the Department of Revenue, where they have the expertise
and history to deal with these types of frivolous suits."
To read the full article, visit the
Bloomberg Law website.
Copyright 2015 By The Bureau of
National Affairs, Inc.. Reprinted with permission.