ALBANY, NY (TIP): An Indiana economist has taken Citigroup to court in an attempt to force the financial giant to pay more than $2 billion in taxes and penalties he says is owed to a government far from his home: New York State.

But Eric Rasmusen is going it solo after Attorney General Eric Schneiderman recently notified a court that his office will not be joining the suit. Rasmusen does have the Buffalo law firm of Hodgson Russ on his side.

“We think the attorney general should join us. He hasn’t given us any legal reason why not he won’t,” Rasmusen, a professor in the business economics and public policy department at Indiana University, said in an interview.

A spokesman for Schneiderman confirmed the attorney general is not joining the case on behalf of New York taxpayers, but declined to provide an explanation.

Rasmusen said New York’s top lawyer is making a potentially costly mistake.

“It makes it more difficult. They have investigative powers that we don’t have to get a hold of documents, interview witnesses. It adds to the credibility to have the attorney general on your side,” Rasmusen said.

The case is being brought under the state’s False Claims Act, a law Schneiderman championed while he was a state senator and that provides whistleblowers with strong protections when they come forward to allege possible wrongdoing.

Also under the whistleblower law, Rasmusen would be eligible to receive a portion of any financial award if his case is successful.

If the attorney general had joined the case and succeeded in court, Rasmusen would be eligible for between 15 percent and 25 percent of the total award. If Rasmusen wins going solo without Schneiderman, he could be in line for between 25 and 30 percent.

The economist said he expects he would give away the money if he wins the case. Rasmusen’s lawyers – Hodgson Russ – also would be in line for attorney’s fees.

Rasmusen, who has authored an academic article on the federal government’s bailout of General Motors, said he became interested in the legal challenge after the Internal Revenue

Service issued a tax notice favorable to rescued banks like Citigroup. He claims in the lawsuit that the tax notice substantially reduced the financial company’s federal tax liabilities.

Rasmusen said he targeted New York because of the state’s strong whistleblower statute and because of the large amount of money Citigroup, headquartered in Manhattan, pays to New York in taxes each year.

Citigroup was among the beneficiaries of a federal bailout after the 2008 financial meltdown, with the U.S. Treasury, through the Troubled Asset Relief Program, investing $45 billion in the company’s stock over a two-month period in late 2008.

Rasmusen alleges that the IRS notice favorable to Citigroup, pertaining to deductions for corporate losses, violated federal law because the bailout of the bank and the issuance of new Citigroup stock amounted to a legal change in ownership, thereby making Citigroup liable for a larger tax bill than it ultimately paid.

Regardless of Washington’s tax decisions, he said, New York is not obligated to treat Citibank’s state tax liability the same as the IRS did with the special carve-out notice for banks. The result is that Citigroup was able to shortchange the state government about $800 million in bank franchise tax payments, he said. When the penalties allowed in New York’s False Claims Act are added in, Rasmusen says Citigroup owes New York State about $2.4 billion. “Maybe the IRS had some good policy reasons for going against what the law said, but it isn’t clear why New York taxpayers have to forfeit revenues in pursuit of some federal policy objective of the Obama administration,” Rasmusen said of the IRS decision affecting Citigroup’s tax obligations.

Daniel Oliverio, the lead lawyer representing Rasmusen, also represented whistleblowers in a case settled with Johnson & Johnson in 2013, which resulted in one of the largest-ever whistleblower cases involving a pharmaceutical company – $2.2 billion.

The Rasmusen lawsuit acknowledges that the IRS notice issued in 2008 was meant as “an attempt to bolster the failing economy” of the nation, but that the agency “improperly promulgated” the rule. As a result, it states, Citigroup “defrauded” New York State by failing to pay its total tax tab between 2010 and 2012 following the federal government’s financial rescue.

Citigroup’s lawyers were recently successful in getting the lawsuit moved from state court to a federal court in Manhattan.

“We believe the claims are without merit,” Danielle Romero-Apsilos, a Citigroup spokeswoman, said in an email response.

Schneiderman has negotiated settlements with Citigroup since becoming attorney general, including a $182 million deal he announced in 2014 pertaining to the bank’s mortgage activities prior to the nation’s housing meltdown. A state tax department spokesman did not immediately comment.