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* An interesting press release on a subject about which I was completely unaware…
WHO: Rob Karr, Illinois Retail Merchants Association president and CEO
Jeff Pape, president of WrestlingGear.Com, Ltd. based in Elmhurst
Bob Jones, president of American Sale based in Tinley Park
WHAT: IRMA members will testify before the Illinois Senate Revenue Committee about issues retailers unfairly face with qui tam lawsuits in this state, specifically related to application of sales taxes on shipping and handling charges.
For example, one retailer who will testify was sued by a Chicago attorney (who has filed hundreds of these lawsuits as a plaintiff to collect unpaid Illinois Use Tax) over an online purchase that brought about $0.80 sales tax into question. The Illinois-based retailer was abiding by Illinois law and interpretation of the Illinois Department of Revenue, but ending up spending about $25,000 fighting this lawsuit, plus an undetermined amount lost in sales and profits while spending time fighting this lawsuit. Interpretation of state tax law and regulations issued by IDOR should be the exclusive purview of the Illinois Department of Revenue.
*Qui tam lawsuits are civil suits filed against a person or company who is believed to have committed fraud against the government. Qui tam lawsuits are filed by whistleblowers under the False Claims Act, which gives whistleblowers a reward or a percentage of what’s recovered if the qui tam lawsuit he/she files recovers money for the government.
WHEN: 2:30 p.m., Wednesday, September 9, 2015
WHERE: Illinois Senate Revenue Committee Hearing
Room 212
Illinois Capitol, 301 S. 2nd Street
…Adding… Background here.
posted by Rich Miller
Wednesday, Sep 9, 15 @ 1:10 pm
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People would have a much better opinion about lawyers if the plaintiffs bar actively policed their own. I’m sure qui tam was well intentioned, but it’s clearly being used and some might say abused in a peculiar way by one law firm (Schad Diamond and Shedden)
Comment by Chicagonk Wednesday, Sep 9, 15 @ 1:19 pm
Interesting. I’d like to know how widespread the problem is.
Comment by Tournaround Agenda Wednesday, Sep 9, 15 @ 1:28 pm
http://www.beveragelaw.com/booze-rules/2014/12/27/illinois-qui-tam-lawsuitsprivate-enforcement-of-a-state-claim-a-bonanza-for-a-plaintiffs-lawyer-and-a-rip-off-of-retailers
Comment by Anon221 Wednesday, Sep 9, 15 @ 1:29 pm
http://www.hmblaw.com/3568.aspx#.VfB6-_7ouuo
Looks like Diamond is the main reason for this hearing.
Comment by Anon221 Wednesday, Sep 9, 15 @ 1:33 pm
Several California wineries filed suit to block these claims earlier this summer.
http://www.winebusiness.com/blog/?go=getBlogEntry&dataId=155203
There’s a link to the actual complaint if you really want to get your qui tam tax litigation freak on.
Comment by Chicago Bars Wednesday, Sep 9, 15 @ 1:57 pm
I thought IRMA was in favor of small government?
If lawyers aren’t offered an incentive to file the lawsuits, no one files them, and the state misses out on the tax revenue.
The other option is hiring more state employees to ensure proper enforcement. Letting lawyers handle it saves the state money because they don’t have to pay the lawyers for the enforcement.
Comment by chi Wednesday, Sep 9, 15 @ 1:58 pm
I think the “reasonable attorneys fee” recovery in a qui tam action is what attracts the bottom feeders. The federal courts have become fairly aggressive in many instances in controlling the assessment of attorney fees when allowed to plaintiffs. The state courts not so much.
Comment by Cook County Commoner Wednesday, Sep 9, 15 @ 2:01 pm
Why don’t judges throw these out as frivolous?
Comment by LIberty Wednesday, Sep 9, 15 @ 2:06 pm
I helped a constituent manage a similar issue. She was selling some sort of craft not unlike a product sold on etsy.com. It was really a shame - a very small operation and a big pain to resolve.
Comment by 47th ward mom Wednesday, Sep 9, 15 @ 2:13 pm
Liberty, a better question would be why is the Attorney General allowing these cases to proceed? In Illinois, the Attorney General controls all whistleblower cases. A relator (Diamond) may file a case, but the AG can intervene and dismiss the case.
Comment by John Wednesday, Sep 9, 15 @ 2:14 pm
Those “bottomfeeders” are saving taxpayers money.
Comment by chi Wednesday, Sep 9, 15 @ 2:26 pm
Qui tam, i think I had that at a restaurant. Very good dish.
Comment by 360 Degree TurnAround Wednesday, Sep 9, 15 @ 2:28 pm
Good for Rob Karr and IRMA…at least SOMETHING will get done today.
Comment by Commonsense in Illinois Wednesday, Sep 9, 15 @ 2:36 pm
IRMA has been leading this fight for years. It’s about time that the legislature paid attention.
Comment by 4 percent Wednesday, Sep 9, 15 @ 2:46 pm
360 - It was an album by The Incredible String Band.
Comment by Excessively Rabid Wednesday, Sep 9, 15 @ 3:15 pm
AFSCME should call Rob Karr for pointers on how to manage a legislative agenda.
Comment by Stratonite Wednesday, Sep 9, 15 @ 3:50 pm
It’s an embarrassment that this continues to happen. But it will never be called for a hearing in the House because Diamond is connected to the Speaker.
Comment by O.W.L. Wednesday, Sep 9, 15 @ 3:55 pm
SB 1828 and HB 2803 would fix the abuses under the current False Claims Act while preserving the rights of true whistleblowers. The legislation has been blocked so far this session - SB 1828 in Assignments in the Senate and HB 2803 in House Rules.
Comment by Just the Facts Wednesday, Sep 9, 15 @ 3:56 pm