A recent bill would have partially closed a loophole in New York’s anti-fraud statute and expanded the state’s ability to root out tax avoidance, noncompliance, and fraud. Instead of protecting New York’s taxpayers, however, Gov. Kathy Hochul sided with the Big Four — the major accounting firms whose job is to minimize their clients’ taxes.

Thanks to Hochul’s veto of S.4730, wealthy individuals, tax dodgers, and would-be (rather, should-be ) out-of-state taxpayers will continue to be advantaged over New York’s honest resident taxpayers. Hochul has indicated she may reconsider if the proposal reaches her again. We urge her to.

Tax evasion is difficult to stop, but well-positioned insiders can help turn the tables. Wisely, New York previously eliminated a gap in its False Claims Act, its major weapon against fraud, that prevented tax cases. Since then, it has enabled whistleblowers to bring suit on the state’s behalf to help it recover monies lost to tax frauds.

New York has benefited enormously from that change: It recouped $330 million from Sprint, $30 million from Harbinger Capital Partners, and $10.75 million from Porsal Equities. As a testament to New York’s leadership in this arena, other jurisdictions have copied its model; both D.C. and Illinois now permit similar cases.

One key loophole remains in New York’s law, however, which S.4730 would have fixed. Under current law, tax cases are permitted for all varieties of False Claims Act violations except when a tax...

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