Tax Whistleblower Blog

California Joins Florida in Offering a State Tax Whistleblower Reward

The Franchise Tax Board, California’s version of the IRS, offers a comparable Whistleblower Reward Program.  Under the legislation, that was proposed by the Terminator himself, Gov. Arnold Schwarzenegger and passed with bi-partisan support, the state of California gives confidential informants as much as 10% of the unpaid taxes collected as a result of a whistleblower’s tip.  California’s version of the Tax Whistleblower Reward Program, like the federal program, is due in part to the state’s growing tax gap–roughly $6.5 billion in 2005 alone.

Officials do not want hunches based on the spending habits of the guy next door. They want bank account numbers, canceled checks and receipts that help them go after big fish: people and companies hiding more than $50,000 in income.

Since California created its reward program, other states – which often follow the Franchise Tax Board’s lead – may do the same.  Florida also has a reward program in place, but the program is very different from the one California has in place.  Florida does not give informants anonymity.  Also, Florida has no income tax. That limits tips mostly to issues involving businesses that are not paying all the sales or corporate tax they owe.