A person who is knowledgeable of a company's business practices threatens to expose unreported income to the IRS if he is not paid money to "keep quiet." Are there any laws that would prevent him from doing such a thing, or are there punishments/fines/sanctions for engaging in such activity? Thanks in advance!
Yes, this is blackmail and is a crime.
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Yes. It is called extortion.
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I can't tell which end of this you are on, but there is a statute which complicates things a bit for the whistle blower.
Please read CA Business & Professions Code 17530.5(a). If the information is derived from "assisting" function re: tax prep, the whistleblower may draw a criminal conviction. Criminal convictions open the gate to civil liability.
The above is something that California Whistle blowers of that class need to worry about. I made CID aware of it last October,,, and CID had not previously heard of it. This means that the welcome mat at CID for whistle blowers doesn't contain the caveat that you may be committing a crime by the act of whistleblowing IF you are in the class to which CA Business & Professions Code 17530.5(a) relates.
Curt Harrington Patent & Tax Law Attorney Certified Tax Specialist by the California Board of Legal Specialization PATENTAX.COM This communication is general information and not legal advice, and does not create an attorney-client relationship. This communication should not be relied upon as any type of legal advice. Please note that no attorney-client relationship exists between the sender and the recipient of this message in the absence of either (1) a signed fee contract and (2) remission of an agreed-upon retainer. Absent such an agreement and retainer, I am not engaged by you as an attorney, nor is any other member of my law firm.