Wednesday, January 8, 2014
JPMorgan Chase Cannot Deduct $1.7 Billion Madoff Settlement Payment
The Justice Department's settlement (press release) of criminal charges against JPMorgan Chase concerning it role in the Bernie Madoff Ponzi scheme prohibits the bank from deducting the $1.7 billion payment to the government:
JPMorgan agrees that the Stipulated Forfeiture Amount shall be treated as a penalty paid to the United States government for all purposes, including all tax purposes. JPMorgan agrees that it will not claim, assert, or apply for a tax deduction or tax credit with regard to any federal, state, local or foreign tax for any portion of the $1,700,000,000 that JPMorgan has agreed to pay to the United States pursuant to this Agreement.
Senators Elizabeth Warren (D-MA) and Tom Coburn (R-OK) today introduced legislation to increase transparency of settlements reached by federal enforcement agencies, including mandatory disclosure of any tax deductions and tax credits for settlement payments.
Update: Wall Street Journal, Rubbing Tax Salt in J.P. Morgan's Settlement Wound
Too bad that Jamie Diamond will not have to pay a penny of this fine himself---and that's the problem with corporate America today. This man is paid MILLIONS per year to run JP Morgan as CEO. Yet he isn't held accountable when things go wrong. This is an agency problem! In the future he should be forced to sign a contract whereby he agrees to be held personally responsible for these types of fines. If you made him put his own money on the line, then I guarantee he would be more vigilant over his little horde of bankers.
Posted by: Milk was a bad choice! | Jan 11, 2014 8:58:15 PM