Infosys Will Pay New York $1 Million for Visa, Tax Violations

Daily Tax Report: State provides authoritative coverage of state and local tax developments across the 50 U.S. states and the District of Columbia, tracking legislative and regulatory updates,...

By Gerald B. Silverman

The global outsourcing and consulting company Infosys Ltd. will pay New York state $1 million to settle a whistle-blower case alleging that the company violated U.S. visa requirements and underpaid state taxes, New York Attorney General Eric T. Schneiderman announced June 23.

The company allegedly circumvented visa requirements by using B-1 visa holders to do work that should otherwise have been performed by H-1B visa holders, according to the settlement ( Anonymous v. Anonymous, N.Y. Sup. Ct., No. 101572/2015, settlement 6/23/17 ).

The case, filed in state court under the False Claims Act, alleged that Infosys underpaid state taxes because employees working under a B-1 visa were paid less than those under H-1B. It is the latest in a number of high-profile qui tam tax cases pursued by Schneiderman, who has created a bureau to pursue False Claims Act and fraud cases.

In a statement, Infosys said the case involved visa holders during 2010 and 2011 and it now “maintains robust policies and procedures to ensure adherence with all applicable regulations and laws.”

“While this investigation centered on alleged paperwork errors, the company committed no wrongdoing and denies all allegations made in this regard,” it said. “This settlement relates to legal issues already resolved under the 2013 settlement with the US Department of Justice, and was reached by both parties to avoid protracted litigation.”

The case stems in part from allegations settled in a similar federal case filed in 2013. Infosys agreed to pay $34 million to the federal government for allegedly misusing the H-1B highly skilled guest-worker program and the B-1 business visa program.

To contact the reporter on this story: Gerald B. Silverman in Albany, N.Y. at GSilverman@bna.com

To contact the editor responsible for this story: Ryan C. Tuck at rtuck@bna.com

Copyright © 2017 Tax Management Inc. All Rights Reserved.

Request Daily Tax Report: State