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New York State Sues Sprint Over Tax Fraud

Apr 19, 2012, 10:26 AM by Eric M. Zeman
updated Apr 19, 2012, 12:54 PM

The New York State attorney general filed a lawsuit against Sprint Nextel today, alleging that the company deliberately failed to bill customers for $100 million worth of taxes over a seven-year period. The lawsuit is the first to be filed with New York's new False Claims Act. The state is seeking three times the amount of uncollected taxes plus unspecified penalties. New York also accused Sprint of purposely refusing to collect the taxes in order to lower the monthly bill for its services when compared to rivals AT&T and Verizon Wireless. Sprint responded, "This complaint is without merit and Sprint categorically denies the complaint's allegations. We have collected and paid over to New York every penny of sales taxes on mobile wireless services that we believe our customers owe under New York state law. With this lawsuit, the Attorney General’s office is claiming New York consumers, who already pay some of the highest wireless taxes in the country, should pay even more."

Reuters »

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JBlaze74

Apr 19, 2012, 12:27 PM

The big question is....

Sprint has an entire department dedicated to correcting billing and tax issues where customers relocate and do not update their address. I have to wonder if some of those unpaid taxes are due to customers moving to New York and not updating their addresses. Without current information, custoemrs would continue to be billed for the address in the system.

HatesBlackberrys

That would be tax-dodging on the people's fault. If the person REPORTS to Spritn that they live in say....Florida, then that's what they go by even if the person lives in NY. With eBilling, it's hard to confirm that because the billing address is se...
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Massively

Apr 19, 2012, 7:12 PM

whoever filed this

i really hope you have a lot of documents to back you up.
I dont want to sound bias but no company's stupid enough to think that they can get away with something as big as this one. if this is true, might have been something unintentional.
I personally doubt this since Sprint,like any other company has a dedicated department for stuffs like this. just my 2cents

imapolymorph

The writing is really on the wall with this one.

Sprint has been conducting shady business practices (like this) and "fuzzy math" billing since it was built.

Does that necessarily mean that sprint meant to produce mal content ?

Absolutely.

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KOL4420

Apr 19, 2012, 11:51 AM

Ice berg ahead.

This is incredible... I am pretty speechless at both Sprint if this is actually true and at the State of NY wanting to collect three times the amount of the taxes that were not charged and then on top unspecified penalties.

How about the states all work towards demanding lowering the monthly charge for smart phones!

Kenzin

Potential greed on both sides.

What I will say is that if Sprint's motivation was indeed to "lower bills" to get a one-up over competition, this will hurt their already fragile economic condition! They are already struggling to stay close to $4 a s...
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Andras888

I guess it's not true. Sprint is up against an infinitely arrogant state and city. Sprint should get three times the legal fees back in the end, plus some penalty from NYC and NYS.

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