As the public’s exposure to digital assets increases, everyone from institutional investors to individual enthusiasts and curious dabblers alike will be wise to consider the accompanying increased legal exposure. One example of an emerging area of law surrounding digital assets relates to various false claims acts (“FCA”). Several states authorize FCA suits based on tax claims. Specifically, Delaware, Florida, Illinois, Indiana, Nevada, New York, Rhode Island and the District of Columbia authorize FCA suits based on tax liability due to not reporting income. State attorneys general are poised to be at the forefront of this emerging area of law.
Recently, New York Attorney General Letitia James issued a warning to digital asset investors and tax advisors. The warning was clear: pay taxes on virtual investments or risk being the target of an FCA investigation. Notably, James cautioned “[t]he consequences of a taxpayer’s failure to properly report income derived from transactions involving cryptocurrency are potentially far-reaching and severe” and could “result in taxpayer liability under the New York False Claims Act, which carries with it triple damages, interest, and penalties … New York False Claims Act liability may also extend to tax professionals advising clients about the taxability of cryptocurrency transactions.” Given the frequent collaboration amongst state attorneys general, James is not alone. Indeed, in 2021, the District of Columbia amended its FCA, closely...
The Animal Rescue League of Iowa warns pet owners about scammers posing as representatives and demanding money to reclaim lost pets DES MOINES, Iowa — The Animal Rescue League of Iowa has issued a ...