3 ms·

I don't think that is correct. "penalties or fines paid to any government agency or instrumentality because of a violation of any law are not deductible" http

I don't think that is correct. "penalties or fines paid to any government agency or instrumentality because of a violation of any law are not deductible" https://www.irs.gov/publications/p535/ch11.html https://www.irs.gov/publications/p535/ch11.html

r0m4n0 10y ago
These aren't criminal violations... And actually they probably aren't penalties or fines either. I'm not a lawyer of any sort but I don't believe restitution == fines/penalties. All depends on verbiage in criminal court, IRS loopholes, and the details of the case. "Big banks such as Bank of America and JPMorgan Chase will receive deductions against the corporate tax that will amount to between half and nearly three-quarters of their multibillion-dollar settlements, at least. Meanwhile, midsized banks and nonbank lenders generally get to deduct the whole shebang." http://www.newsweek.com/2014/11/07/giant-penalties-are-giant-tax-write-offs-wall-street-279993.html http://www.newsweek.com/2014/11/07/giant-penalties-are-giant... and even expenses related to criminal violations can be deducted if they stemmed from your job
- generalledger 10y ago
  Did some digging. The amount that relates to the fine (criminal or civil) is not deductible. Settlement amounts that relate to relief may be deductible. It depends on how the various sums are described in the settlement. According to the Bloomberg article $2.39b of the $5.1b is a fine. So that piece is almost certainly, not deductible. The rest might be, but it depends on how the settlement is worded. Assuming the $2.39b is the only amount that is not deductible, that means Goldman Sachs will be able to offset about $1b in future tax liability. Below is an article about BP. They had to pay about $20b in total, with about $5.5b being considered a fine. That $5.5b was not deductible. http://blogs.wsj.com/moneybeat/2016/04/05/bp-can-take-tax-deduction-on-big-chunk-of-its-oil-spill-settlement/ http://blogs.wsj.com/moneybeat/2016/04/05/bp-can-take-tax-de...
  - r0m4n0 10y ago
    Good point, I didn't read into the ratio of fines/restitution. Appears that half is deductible + any other expense they associate with the case/trial

r0m4n0 10y ago

These aren't criminal violations... And actually they probably aren't penalties or fines either. I'm not a lawyer of any sort but I don't believe restitution == fines/penalties. All depends on verbiage in criminal court, IRS loopholes, and the details of the case. "Big banks such as Bank of America and JPMorgan Chase will receive deductions against the corporate tax that will amount to between half and nearly three-quarters of their multibillion-dollar settlements, at least. Meanwhile, midsized banks and nonbank lenders generally get to deduct the whole shebang." http://www.newsweek.com/2014/11/07/giant-penalties-are-giant-tax-write-offs-wall-street-279993.html http://www.newsweek.com/2014/11/07/giant-penalties-are-giant... and even expenses related to criminal violations can be deducted if they stemmed from your job

generalledger 10y ago
Did some digging. The amount that relates to the fine (criminal or civil) is not deductible. Settlement amounts that relate to relief may be deductible. It depends on how the various sums are described in the settlement. According to the Bloomberg article $2.39b of the $5.1b is a fine. So that piece is almost certainly, not deductible. The rest might be, but it depends on how the settlement is worded. Assuming the $2.39b is the only amount that is not deductible, that means Goldman Sachs will be able to offset about $1b in future tax liability. Below is an article about BP. They had to pay about $20b in total, with about $5.5b being considered a fine. That $5.5b was not deductible. http://blogs.wsj.com/moneybeat/2016/04/05/bp-can-take-tax-deduction-on-big-chunk-of-its-oil-spill-settlement/ http://blogs.wsj.com/moneybeat/2016/04/05/bp-can-take-tax-de...
- r0m4n0 10y ago
  Good point, I didn't read into the ratio of fines/restitution. Appears that half is deductible + any other expense they associate with the case/trial