Wednesday, January 8, 2014
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