9th Circuit: A Relator's Fee paid to Whistle Blower is Ordinary Income

Plaintiff filed a 'whistle blower' (qui tam) action under the False Claims Act (FCA), claiming some hospitals were involved in insurance fraud. The United States intervened and obtained a large settlement, and paid a relator's fee to Plaintiff. Plaintiff accounted for fee as capital gain and paid tax on it. The U.S. Ninth Circuit Court of Appeals held: qui tam award under the FCA was ordinary income.
Robin Mashal
Los Angeles, California
Commercial Litigation
(310) 286-2000

I am a litigation lawyer, licensed to practice law in the State of California. You can reach me by phone at (310) 286-2000.