A presentation produced by Lebau & Neuworth partner attorney Richard Neuworth addresses “Taxes and Employment Law, ” including the topic of “Civil Damages for Filing a Fraudulant Return,” which he presented in September 2020 on Lawline. The topics included such federal remedies under 26 U.S.C. 7434, tax whistleblowing with the Internal Revenue Service rewards program, the new remedy concerning retaliation for reporting tax fraud internally and externally. State remedies were also addressed as well as part of the presentation. Specifically, Richard addresses:
- Wages and Possible Causes of Action concerning Taxes;
- Health Insurance and Possible Causes of Action concerning Taxes; and
- Retirement Plans and Possible Causes of Action concerning Taxes.
He notes that under 26 U.S.C. Section 7434, an employer or an individual that prepares a fraudulent information return can be a defendant in a civil tax case. Section 7434 stipulates:
- If any person willfully files a fraudulent information return with respect to payments purported to be made to any other person, such other person may bring a civil action for damages against the person so filing the return.
- In any action brought upon a finding of liability on the part of the defendant , the defendant shall be liable to the plaintiff in an amount equal to the greater of $5,000 or the sum of any actual damages sustained by the plaintiff as a proximate result of the filing of the fraudulent information return.
- The costs of the action , and in the court’s discretion, reasonable attorneys fees.
In his project, Richard further examines several relevant topics:
- What constitutes a fraudulent return under Section 7434;
- What type of employers are potential targets of actions under 26 U.S.C. 7434;
- Attorney use of Section 7434;
- Case law interpreting Section 7434;
- Lost Social Security benefits and Unemployment benefits;
- Whistleblower claims under 26 U.S.C. 7623 (a) or (b);
- Actions under Section 7623 (a) and (b);
- Awards under Section 7623;
- Statute of Limitations issues;
- State remedies (Maryland has no qui tam or other whistleblower action for tax fraud);
- Health Insurance and taxes;
- How employers fit the definition of 50 employees;
- Tax penalties for not offering health insurance;
- And more.
View Richard's presentation
For more information, contact Lebau & Neuworth at 888-456-2529 or lebauneuworth.com/contact-us.