$35M Fed. Whistleblower Award Not Taxable, Pa. Court Says

Law360 (December 18, 2020, 6:12 PM EST) -- A whistleblower's $35 million reward for pursuing a case of federal mortgage fraud was not taxable income under Pennsylvania law, a state appellate court ruled Friday.

Edward J. O'Donnell, a former Bank of America exec who got to claim 16% of a False Claims Act settlement against the company in 2014, had been fighting with the Borough of Fox Chapel, Pennsylvania, and the Fox Chapel Area School District over whether his qui tam award was subject to the local earned income tax. In Friday's unpublished ruling, the Commonwealth Court of Pennsylvania said it was not.

"Unlike a reward for providing information...

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