An effort to crack down on tax fraud in the District has sparked a fight between several prominent D.C. lobbying groups and powerful lawmakers on the D.C. Council, including the usually business-friendly Chairman Phil Mendelson, D-At large.
A coalition of industry groups has for several weeks been lobbying against the “False Claims Amendment Act of 2019,” which is set to come up for a final vote Tuesday. Essentially, the legislation would allow individuals, rather than just the government, to file lawsuits alleging tax fraud against companies or people, and reward litigants with a portion of any tax money awarded back to the city.
Detractors, led primarily by the D.C. Chamber of Commerce, fear the bill would open the floodgates to a river of frivolous lawsuits against small businesses, perhaps even creating a new cottage industry of attorneys looking to profit off these lawsuits. The bill’s backers, including Mendelson and bill sponsor Councilwoman Mary Cheh, D-Ward 3, believe those are misleading arguments marshaled in support of businesses looking to defraud the government.