Tax Court Snuffs Out Tobacco Settlement Deductions

Law360, New York (December 4, 2013, 6:07 PM EST) -- The U.S. Tax Court ruled Wednesday that cigarette maker General Tobacco Inc. was not permitted to write off payments it was obligated to make related to a multibillion dollar settlement between Big Tobacco and 46 states.

The Tax Court ruled on deductions totaling more than $400 million on General Tobacco's 2004 and 2006 tax returns. The court said the bulk of the payments could not be written off because General Tobacco did not actually pay those amounts into the tobacco settlement fund in the years the...
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