New Tax Costs May Be Hiding In Your Qui Tam Settlement

Law360 (June 29, 2018, 3:18 PM EDT) -- Historically, taxpayers who made settlement payments to the government or relator in actions brought under the False Claims Act[1] could offset those often considerable costs by deducting all or part of the payment for federal income tax purposes. But the Tax Cuts and Jobs Act[2], enacted in December 2017, dramatically shifted the tax treatment of such payments, resulting in the potential loss of valuable tax benefits. Now more than ever, companies must carefully consider the tax treatment of these payments when negotiating False Claims Act settlements with the U.S. Department of Justice.

Deductibility of Settlement Payments After Enactment of the TCJA...

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