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Is there a law prohibiting individuals from threatening to blow the whistle on tax evasion if they are not given "hush money?"

Los Angeles, CA |

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!

Attorney Answers 3

Posted

Yes, this is blackmail and is a crime.

Any individual seeking legal advice for their own situation should retain their own legal counsel as this response provides information that is general in nature and not specific to any person's unique situation. Circular 230 Disclaimer - Advice given in this response cannot be used to eliminate penalties with the IRS or any other governmental agency.

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Posted

Yes. It is called extortion.

Disclaimer of California Attorney. Laws differ from state to state. Although the above response is believed to be accurate, it should not be relied upon as any type of legal advice because the information provided is incomplete. It is intended to educate the reader and a more definite answer should be based on a consultation with a lawyer. No attorney client relation is formed with me without a written contract. Good Luck starts with a strategy and a plan. Robert J. Suhajda, MS,CPA Attorney-At-Law 17721 Norwalk Blvd. #43 Artesia, CA 90701 562-924-8922 Tax Relief Lawyer. Former financial auditor and controller. Admitted to US Tax Court, Income Tax, IRS representation, Fiduciary income tax returns, Estate and Gift tax returns, Homeowner Association Strategist.

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Posted

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.

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