To begin with, the rules cover only government payments, and some companies find ways to write off even the biggest payments. ![]() This sounds absolute, but the law is riddled with exceptions. ![]() That includes criminal and civil penalties, as well as sums paid to settle potential liability for a fine. For decades, Section 162(f) of the tax code prohibited deducting any fine or similar penalty paid to a government for the violation of any law. Sometimes, even amounts paid to the government are deductible, despite corporate wrongdoing. Tax bills have been introduced in Congress over the years to make punitive damages, but the bills never gained traction. Compensatory settlements by businesses are clearly deductible, and even punitive damages are too. Kennedy said, ‘‘The slogan - ‘It’s deductible’ - should pass from our scene.’’ JFK made the comment in 1961 about expense accounts and business entertainment, but it has broader application and still seems relevant more than 60 years later. How about Giuliani’s tax write off? How damages are taxed is a complex subject, but business expenses are less so.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |