{"database": "press", "table": "releases", "rows": [["https://web.archive.org/web/20131125033817/http://www.reed.senate.gov:80/news/release/reed-grassley-fines-and-penalties-for-wrongdoing-should-not-be-tax-deductible", "Reed-Grassley: Fines and Penalties For Wrongdoing Should Not be Tax Deductible", "2013-11-06", "2013", "2013-11", "Democrat", "House", "RI", "Jack Reed", "R000122", "web.archive.org", null, null, "legacy", "Wednesday, November 6, 2013\n             Reed-Grassley: Fines and Penalties For Wrongdoing Should Not be Tax Deductible \n            \n            \n            WASHINGTON, DC \u2013 In an effort to protect taxpayers, hold corporate wrongdoers accountable, and deter future fraud and abuse, U.S. Senators Jack Reed (D-RI) and Chuck Grassley (R-IA) are introducing legislation to rescind tax write-offs for illegal corporate behavior.\u00a0 The bipartisan Government Settlement Transparency & Reform Act would close a loophole that has allowed some corporations to reap tax benefits from payments made at government direction stemming from settling misdeeds.\nCorporations accused of illegal activity routinely settle legal disputes with the government out of court because it allows both the company and the government to avoid the time, expense, and uncertainty of going to trial.\nFederal law prohibits companies from deducting public fines and penalties from their taxable income.\u00a0 But under current law, offending companies may often write off any portion of a settlement that is not paid directly to the government as a penalty or fine for violation of the law.\u00a0 This allows some companies to lower their tax bill by claiming settlement payments to non-federal entities as tax deductible business expenses.\nThe Reed-Grassley bill would require the government and the settling party to reach pre-filing agreements on how the settlement payments should be treated for tax purposes.\u00a0 The bill clarifies the rules about what settlement payments are punitive and therefore non-deductible and increases transparency by requiring the government to file a return at the time of settlement to accurately reflect the tax treatment of the amounts\u00a0 that will be paid by the offending party.\n\u201cA penalty is supposed to deter others because it causes pain to a company\u2019s bottom line.\u00a0 If a company is paying thousands, millions, or even billions in fines, it shouldn\u2019t save money for those same misdeeds, it should be held accountable.\u00a0 The law needs to change to ensure the punishment fits the crime.\u00a0 Congress needs to close this settlement loophole,\u201d said Reed.\n\u201cA penalty should be meaningful or it won\u2019t have the deterrent effect it\u2019s supposed to have,\u201d Grassley said.\u00a0 \u201cThis issue comes up regularly, and this bill would make deductibility clear going forward.\u201d\nSummary: The Government Settlement Transparency & Reform Act (S. 1654)\nCloses tax loophole that allows tax write-offs for corporate violations.\nThe bill would amend the tax code to deny tax deductions for certain fines, penalties, and other amounts related to a violation or investigation or inquiry into the potential violation of any law.\nIt amends subsection (f) of Section 162 of the Internal Revenue Code.\u00a0 Amounts paid by corporations, which constitute restitution for damage caused by the violation of any law are exempted and remain deductible.\u00a0 This section requires that nongovernmental entities which exercise self-regulatory powers be treated as government entities for purposes of disallowing deductions under this section. The bill requires the government to stipulate the tax treatment of the settlement agreement.", 1, "2026-03-30T12:14:52Z", "2026-03-30T12:14:52Z"]], "columns": ["url", "title", "date", "year", "month", "party", "chamber", "state", "member_name", "bioguide_id", "domain", "scraper", "source", "date_source", "text", "has_text", "collected_at", "updated_at"], "primary_keys": ["url"], "primary_key_values": ["https://web.archive.org/web/20131125033817/http://www.reed.senate.gov:80/news/release/reed-grassley-fines-and-penalties-for-wrongdoing-should-not-be-tax-deductible"], "units": {}, "query_ms": 9.423473849892616, "source": "dwillis/congress-press", "source_url": "https://github.com/dwillis/congress-press", "license": "MIT", "license_url": "https://github.com/dwillis/congress-press/blob/main/LICENSE"}