Tax policy affects communities across Berks County. Businesses and taxpayers rely on a system that is predictable, fair and consistently applied.
House Bill 1697, which seeks to create a state False Claims Act, would change how tax disputes are handled. As drafted, the proposal would allow private lawsuits over state and local tax issues currently resolved through audits and administrative review.
The Pennsylvania Department of Revenue provides a centralized framework for tax enforcement. That structure helps ensure consistent application of tax law and gives taxpayers and businesses a clear process for resolving disagreements rooted in interpretation.
Consider a small accounting firm helping a regional hospital navigate complex Medicaid billing rules. A disgruntled former employee partners with a contingency-fee attorney to allege false claims based on a disputed billing interpretation. No fraud needs to be proved, yet the firm could face treble damages and penalties of up to $27,000 per claim. Litigation costs alone could force a settlement, and the attorney and former employee pocket up to 30%. The firm’s reputation suffers lasting damage despite no finding of wrongdoing.
This is why the federal government and many states exclude tax matters from false claims laws. Pennsylvania should consider doing the same.
Maintaining a predictable tax system supports taxpayers, strengthens businesses and benefits communities throughout Berks.
Peter Calcara
Pennsylvania Institute of...
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