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We discuss False Claims Act lawsuits pretty frequently in FWF. See below for excerpt about a lawyer that's made a good business, going after online sellers.

Chicago lawyer Stephen Diamond has made a business out of filing qui tam cases accusing internet retailers of failing to pay correct taxes to the state of Illinois.

Diamond and his law firm have filed more than 900 qui tam cases in Cook County, Illinois, courts and obtained nearly $30 million in settlements over a 15-year period, Bloomberg Big Law Business reports. Diamond’s share of the proceeds is $11.6 million, which includes his share of the settlements, attorney fees and costs.

More: http://www.abajournal.com/news/article/chicago_lawyer_has_filed_...

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Brilliant idea!

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I had one company charging me tax on shipping too....wonder if that is legal

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jigsaw1975 said:   I had one company charging me tax on shipping too....wonder if that is legal
  
It is in Michigan. I was surprised the first time I noticed it, for I considered shipping a service, and we only tax merchandise, but the state Treasury folks consider shipping to be part of the cost of the merchandise.

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More lengthy article on it:
https://bol.bna.com/settlement-data-reveals-lawyers-false-claims...


"• Diamond and his law firms have negotiated 371 settlements, netting $29.3 million in proceeds and attorneys’ fees for the state and himself; • the amount of unpaid taxes in dispute is estimated by tax practitioners at $6.7 million; •"

Seems that the law is unclear in some respects leading to problems then he swoops in with a $50k lawsuit on someone who technically owes $5k. Then settles it for $10 or 20k. Rinse and repeat 1000 times. Not really a public service. The guy has netted more money in legal fees than the taxes that were ever owed. Sometimes his lawsuits sabotage the state dept. of revenue attempt to negotiate settlements or payment plans with retailers.

"A unique quality of the FCA permits a private citizen, acting as a whistle-blower or relator, to sue on behalf of Illinois to correct an alleged fraud. Various iterations of Diamond’s law firms, including Beeler, Schad & Diamond P.C.; Schad, Diamond & Schedden P.C.; and Stephen B. Diamond P.C., are designated as relators in each case."

IANAL but it seems to me that if you have to change your name various ways then this is manipulating the law in some way that wasn't intended.

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no proof he changes his name (Diamond P.C. is in each). Likely he has had iterations of partners over the years.

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taxmantoo said:   
jigsaw1975 said:   I had one company charging me tax on shipping too....wonder if that is legal
  
It is in Michigan. I was surprised the first time I noticed it, for I considered shipping a service, and we only tax merchandise, but the state Treasury folks consider shipping to be part of the cost of the merchandise.

  Likewise, in Texas, if the merchandise is taxable, then the shipping is taxable.  If your entire order is tax-exempt, then shipping is exempt.

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imbatman said:   no proof he changes his name (Diamond P.C. is in each). Likely he has had iterations of partners over the years.
  
OK yeah that makes sense.   I had interpreted it differently (probably wrong) as if he was putting out a batch of suits all at once with various firm names for some reason.

 

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"78 percent of the settlements involved a defendant’s failure to properly apply the sales and use tax on shipping and handling charges on merchandise sold into Illinois."

and

"Diamond’s business model also suffered a blow in April when the Illinois Department of Revenue (DOR) issued regulations clarifying the taxability of shipping and handling charges"

So the vast majority of his cases were about tax on shipping which was apparently unclear in the state regulations.

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still unclear about why he can sue if it's IL that was harmed??

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needhelpplease said:   still unclear about why he can sue if it's IL that was harmed??
The false claims act allows a person to have standing to sue. His client, a whistleblower, stands in the shoes of the State when he sues. So it's the state that's harmed, and his client (whistleblower) gets a reward for exposing the fraud.  

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so he gets a " big " cut of the whistle blower ?

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anyone want to partner up with me and give it a go in a different state?  sounds like fun!
 

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skarydrunkguy said:   anyone want to partner up with me and give it a go in a different state?  sounds like fun!
  The state would have to have a favorable false claims act, and allow it to apply to sales tax. Then you'd have to find it being improperly applied.

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stanolshefski said:   
skarydrunkguy said:   anyone want to partner up with me and give it a go in a different state?  sounds like fun!
  The state would have to have a favorable false claims act, and allow it to apply to sales tax. Then you'd have to find it being improperly applied.

  nobody said it wouldn't be work...  heck, Michigan charging tax on shipping sounds like a good prospect!

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When sales tax was 5%, most people had no issue paying it. Somehow tho- ball teams wanted stadiums and that added 1/2% tax of more. So from there we are up to around 11% in Chicago- now it makes sense to avoid that tax.

As far as class actions- the only one who makes out is the lawyers. Note one settlement was a year worth of credit monitoring. Why would I want this service compared to the $20?

One gripe is cell phone taxes. Here in PA there is $1.65 a month 911 fee. So on a $10 plan- that is 16.5% tax and we did not even get to the tax yet.

Now some want a VAT- which would be a national sales tax. Things could get crazy fast.

Even as it is I have not gotten use to a world price point per $4 gas. SS COLA is .3%. So for me that comes to around $2 increase. woo hoo.

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sunsetcliff said:   When sales tax was 5%, most people had no issue paying it. Somehow tho- ball teams wanted stadiums and that added 1/2% tax of more. So from there we are up to around 11% in Chicago- now it makes sense to avoid that tax.

 

  When was Chicago sales tax 5%? I remember my first flight connection in 1990. Connection was at O'Hare and I remember thinking 8% sales tax was crazy compared to my local 6%

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