Relators filed qui tam action under Illinois False Claims Act, claiming that Defendants knowingly charged customers sales tax at 3% instead of the statutorily required rate of 6.25% on internet sales shipped to Illinois, resulting in loss of tax revenue to Illinois. Prior to qui tam action being filed, Illinois Department of Revenue (DOR) audited Defendants, which resulted in a proposed tax liability of $2.1 million which Defendants did not dispute. Court properly granted State's motion to dismiss the qui tam complaint and denied relators' cross-motion for a portion of the payment. DOR's "notice of proposed liability" issued at conclusion of audit did not result from State's pursuit of an alternate remedy, and thus relator was not entitled to share of the payment. (HYMAN and PIERCE, concurring.)
Illinois Appellate Court
Civil Court
Qui Tam Action