The Senate Taxes Committee on Thursday approved a bill to force fraud criminals to pay back every dollar they stole from Minnesota taxpayers. SF 5032, the Take It Back Act, was authored by Sen. Steve Drazkowski (R-Mazeppa) and has broad support from both Republicans and Democrats in the House and Senate.
The bill creates a 100% tax on money obtained through fraud against public programs. That tax comes on top of any criminal penalties or restitution a court already ordered. Money collected goes into a dedicated account that must be used for income tax relief for Minnesota taxpayers.
"Fraud is out of control in Minnesota and has been for more than a decade," said Sen. Drazkowski. “I get asked everywhere I go, ‘what are you doing about fraud and when are we going to get our money back?’ This is the answer. Taxpayers earned their money the old-fashioned way, through hard work. We owe it to them to get their money back."
The 100% tax applies to anyone convicted of fraud against a public program. Separately, the Department of Revenue can impose a 100% penalty on individuals they know committed fraud, even without a criminal conviction.
The Department of Revenue will handle enforcement rather than the courts. Tax collectors and auditors can go after money that has been hidden in shell companies or sent overseas and can pursue those who received fraudulent funds via kickbacks or bribes, reaching people who may never face criminal charges. The bill also requires the Department of Revenue to share investigative and tax data with the new Office of Inspector General and the Bureau of Criminal Apprehension's Financial Crimes and Fraud Section, strengthening the state's ability to track down stolen funds.