$35M Whistleblower Payment Is Taxable, Pa. Justices Told

By James Nani (October 27, 2021, 7:12 PM EDT) -- A roughly $35 million whistleblower award received under the federal False Claims Act is subject to Pennsylvania's local earned income tax, the state's Supreme Court justices were told during oral arguments Wednesday. 

The justices took up the appeal over whether a payment received by whistleblower Edward J. O'Donnell under the federal False Claims Act counts as earned income under the state statutes. O'Donnell is a former Bank of America executive who claimed a $35 million award as part of a settlement in a federal mortgage fraud suit. The Commonwealth Court of Pennsylvania held in December the payment wasn't taxable income because it...

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