Editing False Claims Act of 1863 (section)

==Practical application of the law==
{{citation needed section|date=December 2024}}
The False Claims Act has a detailed process for making a claim. Mere complaints to the government agency are insufficient to bring claims under the Act.  A complaint (lawsuit)
must be filed in a [[U.S. District Court]] (Federal court) ''in camera'' (under seal). The [[United States Department of Justice|Department of Justice]] (DOJ) must thence investigate within 60 days, but it often enjoys several months' worth of extensions by the Court.{{speculation inline|date=December 2024}} In this time, the department decides whether it will pursue the case.

If the case is pursued by DOJ, the amount of the reward is less than if the Department of Justice had decided not to pursue the case and the plaintiff/relator continues the lawsuit himself. However, the success rate is higher in cases that the Department of Justice decides to pursue.

Technically, the government has several options in handing cases. These include: 
# intervene in one or more counts of the pending ''qui tam'' action. This intervention expresses the Government's intention to participate as a plaintiff in prosecuting that count of the complaint. The department intervenes in fewer than 25% of filed ''qui tam'' actions.
# decline to intervene in one or all counts of the pending ''qui tam'' action. If the United States declines to intervene, the relator (i.e., plaintiff) may prosecute the action alone and thus on behalf of the United States, but the United States is not a party to the proceedings apart from its right to any recovery. This option is frequently used by relators and their attorneys.
# move to dismiss the relator's complaint, either because there is no case, or the case conflicts with significant statutory or policy interests of the United States.

In practice, there are two other options for the Department of Justice:
# settle the pending ''qui tam'' action with the defendant prior to the intervention decision. This usually, but not always, results in a simultaneous intervention and settlement with the Department of Justice (and is included in the 25% intervention rate).
# advise the relator that the Department of Justice intends to decline intervention.  <!-- Comment out newline to have article match the citation). -->This usually, but not always, results in dismissal of the ''qui tam'' action, according to the U.S. Attorney's Office of the Eastern District of Pennsylvania.<ref>{{Cite web|url=http://www.usdoj.gov/usao/pae/Documents/fcaprocess2.pdf |archive-url=https://web.archive.org/web/20040416071506/http://www.usdoj.gov/usao/pae/Documents/fcaprocess2.pdf |archive-date=2004-04-16 |url-status=live|title=False Claims Act Cases: Government intervention in Qui Tam (whistleblower) suits – Memo of the U.S. Attorneys' Office of the Eastern District of Pennsylvania <!-- Note: much of the above is copied verbatim from the (PD-USGov) source. -->|access-date=Jul 23, 2020}}</ref>
There is case law where claims may be prejudiced if disclosure of the alleged unlawful act has been reported in the press, if complaints were filed to an agency instead of filing a lawsuit, or if the person filing a claim under the act is not the first person to do so.  Individual states in the U.S. have different laws regarding whistleblowing involving state governments.

===Federal income taxation of awards under FCA in the United States===
The U.S. [[Internal Revenue Service]] (IRS) takes the position that, for Federal income tax purposes, ''qui tam'' payments to a relator under FCA are [[ordinary income]] and not [[capital gain]]s. The IRS position was challenged by a relator in the case of ''Alderson v. United States;''<ref>{{cite court |litigants=Alderson v. United States |vol=686 |reporter=F.3d |opinion=791 |court=[[9th Cir.]] |date=2012 |url=https://www.leagle.com/decision/infco20120718127 |access-date=2018-11-08 }}</ref> and, in 2012, the U.S. Court of Appeals for the Ninth Circuit upheld the IRS' stance. As of 2013, this remained the only circuit court decision on tax treatment of these payments.<ref>Robert W. Wood and Dashiell C. Shapiro [http://www.woodllp.com/Publications/Articles/pdf/Blowing_the_Whistle.pdf Blowing the Whistle on Taxing Whistleblower Recoveries] Tax Notes, December 2, 2013. pp. 983-988</ref>