Oh Captive! My Captive! New York’s Qui Tam Provision for Tax Is Validated in the Captive Insurance Context

Abstract

On August 30, 2018, in Anonymous v. Anonymous, the Appellate Division of the New York Supreme Court, First Judicial Department held, for the first time, that a plaintiff-relator had sufficiently alleged that the defendants had violated the New York False Claims Act by using a captive insurance company for the sole purpose of evading taxes. The tax evasion scheme was brought to light by a former employee who utilized the New York False Claims Act’s qui tam provision. A qui tam provision allows a private citizen to stand in the shoes of the government when bringing an action. This Comment argues that Anonymous is an example of how beneficial a tax qui tam provision can be in uncovering complex and clandestine tax avoidance schemes.