Taxes - Whistleblower Reward Program - Alterations

EXPLANATION: CAPITALS INDICATE MATTER ADDED TO EXISTING LAW.
[Brackets] indicate matter deleted from existing law.
*hb1197*

HOUSE BILL 1197
Q7 6lr3018
CF SB 766
By: Delegates Palakovich Carr and Feldmark
Introduced and read first time: February 11, 2026
Assigned to: Ways and Means

A BILL ENTITLED

AN ACT concerning 1

Taxes – Whistleblower Reward Program – Alterations 2

FOR the purpose of altering and expanding the type of tax enforcement actions for which a 3
certain whistleblower may, under certain circumstances, receive a monetary award 4
for providing certain original information to the Comptroller under the 5
Whistleblower Reward Program; authorizing the Attorney General and State 6
agencies to bring a tax enforcement action under the Program; requiring the 7
Comptroller to provi de to the Attorney General or a State agency certain original 8
information under certain circumstances; requiring the Attorney General and State 9
agencies to provide to the Comptroller information pertaining to a final assessment 10
that results from a whistleb lower’s original information under certain 11
circumstances; and generally relating to the collection and enforcement of taxes in 12
the State. 13

BY repealing and reenacting, with amendments, 14
Article – Tax – General 15
Section 1–401 through 1–403, 1–405(a), and 1–406 16
Annotated Code of Maryland 17
(2022 Replacement Volume and 2025 Supplement) 18

BY adding to 19
Article – Tax – General 20
Section 1–401.1 21
Annotated Code of Maryland 22
(2022 Replacement Volume and 2025 Supplement) 23

SECTION 1. BE IT ENACTED BY THE GENERAL ASS EMBLY OF MARYLAND, 24
That the Laws of Maryland read as follows: 25

Article – Tax – General 26

2 HOUSE BILL 1197

1–401. 1

(a) In this subtitle the following words have the meanings indicated. 2

(b) “Covered enforcement action” means an enforcement action , INCLUDING A 3
JUDICIAL OR ADMINISTRATIVE ACTION, brought by the Comptroller , THE ATTORNEY 4
GENERAL, OR A STATE AGENCY under this OR ANY OTHER article that concerns: 5

(1) (i) the [State and county income ] tax liability of an individual 6
taxpayer or a couple that is married and files jointly whose federal adjusted gross income 7
is at least $250,000; or 8

(ii) the [State and county] tax liability of a business, including those 9
persons who are jointly and severally liable for the [State] tax liability of a business under 10
this OR ANY OTH ER article, the annual gross receipts or sales of which are at least 11
$2,000,000; and 12

(2) taxes in dispute exceeding $250,000. 13

(c) “Original information” means information that: 14

(1) is derived from the independent knowledge or analysis of a 15
whistleblower; 16

(2) is not known , AS APPLICABLE, to the Comptroller , THE ATTORNEY 17
GENERAL, OR A STATE AGENCY from any other source, unless the whistleblower is the 18
original source of the information; 19

(3) is not exclusively derived from an allegation made in a judicial or 20
administrative hearing, in a governmental report, hearing, audit, or investigation or from 21
the news media, unless the whistleblower is a source of the information; and 22

(4) is provided to the Comptroller in a sworn affidavit for the first time on 23
or after October 1, 2021. 24

[(d) “Related action” means any judicial or administrative action brought by a 25
State or local agency or entity based on the original information provided by a 26
whistleblower to the Comptroller under this subtitle.] 27

[(e)] (D) (1) “Whistleblower” means an individual or entity who provides, or 28
two or more individuals or entities acting jointly who provide, in accordance with this 29
subtitle, information to the Comptroller in a sworn affidavit relating to a violation of [State 30
tax] law THAT IMPOSES A TAX UNDER THIS OR ANY OTHER ARTICLE, including a rule 31
or regulation, that has occurred, is ongoing, or is about to occur. 32

HOUSE BILL 1197 3

(2) “Whistleblower” includes an individual who provides information to a 1
law enforcement agency before providing the information to the Comptroller. 2

1–401.1. 3

THIS SUBTITLE APPLIES ONLY TO A COVERED EN FORCEMENT ACTION FOR 4
WHICH THE COMPTROLLER, THE ATTORNEY GENERAL, OR A STATE AGENCY IS 5
AUTHORIZED TO BRING IN THE ENFORCEMENT OF A TAX THAT IS: 6

(1) IMPOSED UNDER THIS OR ANY OTHER ARTICLE; AND 7

(2) COLLECTED BY OR PAID TO THE STATE. 8

1–402. 9

(a) Subject to the limitations of this subtitle and except as provided in subsection 10
[(b)] (C) of this section, a whistleblower who voluntarily provides original information to 11
the Comptroller in a sworn affidavit that, because of the original information, results in a 12
final assessment in a covered enforcement action [, or a successful outcome again st a 13
taxpayer in a related action,] shall be entitled to receive a monetary award of at least 15% 14
but not exceeding 30% of the taxes, penalties, and interest collected through the 15
enforcement action [or related action]. 16

(B) (1) IF A WHISTLEBLOWER PROVIDES ORIGINAL INFORMATION TO THE 17
COMPTROLLER INVOLVING A TAX FOR WHICH THE ATTORNEY GENERAL OR A STATE 18
AGENCY IS AUTHORIZED TO BRING A COVERED E NFORCEMENT ACTION , THE 19
COMPTROLLER SHALL PRO VIDE THE ORIGINAL IN FORMATION TO THE ATTORNEY 20
GENERAL OR THE STATE AGENCY, AS APPLICABLE. 21

(2) IF, BECAUSE OF A WHISTLE BLOWER’S ORIGINAL INFORMATI ON, 22
THE ATTORNEY GENERAL OR A STATE AGENCY BRINGS A COVERED ENFORCEMENT 23
ACTION THAT RESULTS IN A FINAL ASSESSMENT, THE ATTORNEY GENERAL OR THE 24
STATE AGENCY SHALL PR OMPTLY PROVIDE TO THE COMPTROLLER INFORMATION 25
PERTAINING TO THE FI NAL ASSESSMENT FOR P URPOSES OF MAKING A 26
DETERMINATION UNDER THIS SUBTITLE CONCERNING AN AWARD. 27

[(b)] (C) A whistleblower who provides information to the Comptroller in a 28
sworn affidavit that is related t o original information previously reported to the 29
Comptroller by another whistleblower who is eligible for an award under subsection (a) of 30
this section may not be entitled to an award unless the information provided by the 31
whistleblower materially adds to the information previously reported to the Comptroller. 32

[(c)] (D) If two or more whistleblowers are eligible for an award under subsection 33
(a) of this section arising out of the same covered enforcement action [or related action]: 34

4 HOUSE BILL 1197

(1) the total award may not exceed 30% of the taxes, penalties, and interest 1
collected through the enforcement action [or related action]; and 2

(2) the Comptroller shall determine the allocation of the award among the 3
eligible whistleblowers. 4

1–403. 5

(a) (1) The determination of the amount of an award made in accordance with 6
§ 1–402 of this subtitle shall be solely in the discretion of the Comptroller. 7

(2) In determining the amount of the award, the Comptroller shall 8
consider: 9

(i) the significance of the information provided by the whistleblower 10
to the success of the covered enforcement action [or related action]; 11

(ii) the degree of assistance provided by the whistleblower and any 12
legal representative of the whistleblower in the covered enforcement action [or re lated 13
action]; 14

(iii) the amount of the unpaid taxes owed the State that may be 15
recovered under the covered enforcement action [or related action]; 16

(iv) the interest of the State in deterring violations of this AND ANY 17
OTHER article and promoting the reporting by whistleblowers of information relating to 18
those violations; and 19

(v) any additional relevant factors that the Comptroller may 20
establish by regulation. 21

(b) An award may not be provided to a whistleblower if the C omptroller 22
determines that the whistleblower: 23

(1) is, or was at the time that the whistleblower acquired the original 24
information provided to the Comptroller, a member, an officer, or an employee of a federal, 25
state, or local law enforcement agency resp onsible for the enforcement of tax –related 26
matters; 27

(2) was convicted of a criminal violation related to the covered enforcement 28
action [or related action ] for which the whistleblower otherwise could receive an award 29
under this section; 30

(3) could hav e been convicted of a criminal violation or held personally 31
liable for the tax liability related to the covered enforcement action [or related action] for 32
which the whistleblower otherwise could receive an award under this section had the 33
HOUSE BILL 1197 5

whistleblower pro vided the original information before the expiration of any applicable 1
statute of limitations for prosecution or assessment of the whistleblower; or 2

(4) when submitting information under this subtitle, knowingly and 3
willfully made false, fictitious, or fraudulent statements to the Comptroller or used any 4
false writing or document knowing the writing or document contained a false, fictitious, or 5
fraudulent statement or entry. 6

(c) (1) A determination of the Comptroller under this section may be 7
challenged in accordance with Title 10, Subtitle 2 of the State Government Article if the 8
challenge is brought within 45 days of the date of the determination. 9

(2) In bringing a challenge in accordance with paragraph (1) of this 10
subsection, the whistleblower may not challenge: 11

(i) the decision to conduct or the method of conducting an 12
investigation arising from the original information provided by the whistleblower; 13

(ii) the amount of any unpaid taxes, penalties, or interest due to the 14
State arising from the original information provided by the whistleblower; 15

(iii) the result of a covered enforcement action [or related action ] 16
arising from the original information provided by the whistleblower; or 17

(iv) any settlement between the State and a person having a tax 18
liability that arises from the original information provided by the whistleblower. 19

1–405. 20

(a) A current or prospective employer, contractor, or agent may not discharge, 21
demote, suspend, threaten, or harass, directly or indirectly, or in any other manner 22
discriminate or retaliate against an individual in the terms and conditions of employment 23
because of a lawful act done by that individual: 24

(1) in providing information to the Comptroller or a law enforcement 25
agency concerning a possible vi olation of [State tax] law THAT IMPOSES A TAX U NDER 26
THIS OR ANY OTHER AR TICLE, including a rule or regulation, that has occurred, is 27
ongoing, or is about to occur; 28

(2) in initiating, testifying in, or assisting in an investigation or [judicial or 29
administrative] COVERED ENFORCEMENT action [of the Comptroller or law enforcement 30
agency or a related action]; 31

(3) in reporting a violation of this [title] OR ANY OTHER ARTICLE to 32
another governmental entity or to a director, supervisor, or compliance officer of the 33
employer, contractor, or agent; or 34
6 HOUSE BILL 1197

(4) in refusing or declining any agreement that would provide for 1
arbitration of claims arising under this OR ANY OTHER article. 2

1–406. 3

Nothing in this subtitle may be construed to: 4

(1) preempt, limit, or restrict the authority or discretion of the Comptroller 5
to investigate or enforce a violation of this OR ANY OTHER article; 6

(2) limit any power otherwise granted in this article or other laws to the 7
Comptroller, Attorney General, State agencies, or loc al governments to investigate or 8
enforce possible violations of this OR ANY OTHER article; 9

(3) authorize a private right of action involving a violation of this OR ANY 10
OTHER article, except as specifically authorized in this OR ANOTHER article; 11

(4) prevent or prohibit a person from voluntarily disclosing any 12
information concerning a violation of this OR ANY OTHER article to any law enforcement 13
agency or self–regulatory organization; or 14

(5) preempt, limit, restrict, or otherwise affect the rights an d rewards 15
provided to qui tam plaintiffs under the Maryland False Claims Act. 16

SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect 17
October 1, 2026. 18