Knowledge Center

Friday, September 26, 2014

HMB's Jordan Goodman Quoted in Another Qui Tam Article

"Panel: Taxpayers Increasingly Squeezed Between Qui Tam and Class Action Suits "

By Maria Koklanaris

Excerpt from Tax Notes/State Tax Today, Wednesday, September 24, 2014

Unless more states follow the example of Florida and Tennessee, which passed laws completely removing taxes from false claims acts, taxpayers will continue to face the threat of both qui tam whistleblower suits and class action lawsuits, a panel of practitioners said September 23.

The practitioners, speaking at the Institute for Professionals in Taxation Sales Tax Symposium in Washington, made their point by staging a humorous skit involving a fictional taxpayer that found itself subject to a qui tam suit for failing to pay sales tax on shipping charges of its merchandise. Then, after consulting with counsel, the retailer decided to start paying sales taxes on shipping and to pass through these amounts on its invoices to customers. The result: The retailer then found itself subject to a class action lawsuit for paying and passing on the taxes. But while their skit was humorous, the practitioners said, the issue could not be more serious.

Unless lawmakers curb the practice by taking tax issues completely out of qui tam, "it is going to get worse and worse and worse," said Kranz, who was joined on the panel by Carolynn Iafrate Kranz of Industry Sales Tax Solutions LLC, Jordan Goodman of Horwood Marcus & Berk, and William Backstrom Jr. of Jones Walker LLP.

Goodman said perhaps the best solution lies in the American Bar Association's model statute. The statute would minimize consumer class action exposure for telecommunications companies dealing with state transaction tax refund claims. The state tax world has been looking at it as a framework to help class actions brought against retailers for the overcollection of state taxes. In recent years, many of these retailers have been telecommunications companies.

"Talk to your legislators," Goodman said. "Lobby to get [the model statute] passed."

To read more, please visit the Tax Analysts website.

Copyright 2014 Tax Analysts. Reprinted with permission.

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