What's happening
This bill amends state finance law to increase liability for individuals or entities making false tax records or statements, or concealing obligations, to New York State or local governments.
Why it matters
Expands liability for tax fraud to individuals/entities controlling subsidiaries or related businesses. , not just direct taxpayers—closing loopholes that let people avoid responsibility by acting through other entities they control.
Applies to actions that conceal, improperly avoid, or decrease tax obligations, not just the creation of false records/statements. , making it harder to escape liability through passive or indirect means.
Allows for recovery of consequential damages, including interest owed under tax law. , which could significantly increase financial penalties and bolster government resources for enforcing tax compliance.
Covers conduct retroactively as well as going forward. , meaning that past tax fraud or concealment—if discovered—can be prosecuted under the new, stricter standards, increasing potential legal risk for those with prior questionable conduct.
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Who cares
Headline styles
Punish Tax Fraud Records
Plain English, a few words. Used as the page title.
Sponsors
No co-sponsors yet.
History
- Referred to finance
Full text
2 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
944
2025-2026 Regular Sessions
IN SENATE (Prefiled)
January 8, 2025
Introduced by Sen. HOYLMAN-SIGAL -- read twice and ordered printed, and when printed to be committed to the Committee on Finance
AN ACT to amend the state finance law, in relation to the liability of a person who makes or uses a false record or statement material to an obligation to pay money to the state or a local government under the tax law, or who conceals or improperly avoids or decreases an obligation to pay money to the state or a local government under the tax law
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. Section 189 of the state finance law is amended by adding a new subdivision 1-a to read as follows:
1-a. Any person who, in accordance with the criteria set forth in subdivision four of this section:
(a) makes, uses, or causes to be made or used, a false record or statement material to their own obligation to pay money to the state or a local government under the tax law, or an obligation of a subsidiary, partnership, corporation or entity that they control; or
(b) conceals or improperly avoids or decreases their own obligation to pay money to the state or a local government under the tax law, or an obligation of a subsidiary, partnership, corporation or entity that they control; shall be liable for damages, including consequential damages, which the state or local government sustains because of the act of that person. For purposes of this section, consequential damages includes interest owed pursuant to the tax law.
§ 2. Paragraph (b) of subdivision 3 of section 188 of the state finance law, as amended by chapter 379 of the laws of 2010, is amended to read as follows:
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD03215-01-5
(b) require no proof of specific intent to defraud, provided, however that acts occurring by mistake or as a result of mere negligence are not covered by this [article] definition.
§ 3. This act shall take effect immediately and shall apply to all false claims, records, statements and obligations concealed, avoided or decreased on, prior to, or after such effective date.
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Sponsor's memo
Title of bill
An act to amend the state finance law, in relation to the liability of a person who makes or uses a false record or statement material to an obligation to pay money to the state or a local government under the tax law, or who conceals or improperly avoids or decreases an obligation to pay money to the state or a local government under the tax law
SUMMARY OF SPECIFIC PROVISIONS::
Section 1 of the bill adds a new subdivision 1-a to section 189 of the State Finance Law ("Liability for certain acts") to create liability under New York's False Claims Act for any individual or business with a net income or sales of one million dollars or more who: (1) makes, uses, or causes to be made or used, a false record or statement material to their own obligation to pay taxes owed to the State or a local govern- ment, or an obligation of a subsidiary, partnership, corporation or entity that they control; or (2) conceals or improperly avoids or decreases their own obligation to pay taxes owed to the State or a local government, or an obligation of a subsidiary, partnership, corporation or entity that they control; where such taxes owed exceed $350,000. In such instances, the individual or business would be liable for damages, including interest owed on the unpaid tax obligations.
Read the full memo (644 words)
Section 2 of the bill clarifies the definition of "knowing and knowing- ly" found in section 188 of the State Finance Law for the purposes of the False Claims Act.
Section 3 of the bill is the effective date.
Justification
The New York False Claims Act (Article 13 of the State Finance Law) is a powerful and effective civil fraud-fighting and whistleblowing tool, providing a cause of action that may be brought by the Attorney General, a local government, or a private citizen in a qui tam suit for false claims that have been submitted to New York State or a local government. Amendments to the New York False Claims Act adopted in 2010 authorized claims based on knowingly omitted tax fraud where the person or business against whom the action is brought has an annual net income or sales of $1 million or more, and the damages pleaded in the action exceed $350,000.
This legislation would allow the New York False Claims Act to be used as a tool to recover large unpaid tax obligations based on false claims made by wealthy individuals or businesses without the statutory require- ment that such false claims were made knowingly. Damages in such claims would be limited to the tax obligation owed, plus consequential damages including any interest owed on the unpaid obligation pursuant.to New York State Tax Law, as opposed to the treble damages and statutory civil penalties found elsewhere in the New York False Claims Aqt. By doing so, the New York False Claims Act would become an important tool to complement tax enforcement efforts being undertaken by the New York State Department of Taxation & Finance, by allowing the Attorney Gener- al, local governments, and citizen whistleblowers to bring claims to recover taxes that were improperly unpaid to New York State or local governments by high income individuals and businesses without needing to clear the evidentiary hurdle of proving that such false claims were made knowingly.
PRIOR LEGISLATIVE HISTORY::
S.556 of 2023-2024 (Hoylman-Sigal): Died in Finance
S.5319 of 2021-2022 (Hoylman): Died in Finance
A.2506 of 2021-2022 (Weinstein): Died in Ways & Means
S.8872 of 2020 (Hoylman): Died in Rules
A.11066 Of 2020 (Weinstein): Died in Ways & Means
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS::
To be determined.
EFFECTIVE DATE::
This act shall take effect immediately and shall apply to all false claims, records, statements and obligations concealed, avoided or decreased on, prior to, or after such effective date.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.