New Study Reveals How Corporate Settlements Become Tax Write Offs

By Alexandra Hill, WBGO News
January 3, 2013

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A new study reveals that corporations that are forced to pay out large settlements for their crimes may actually be escaping punishment.

The report, called Subsidizing Bad Behavior, details how corporations accused of wrongdoing in banking, environmental, and consumer safety issues, often settle disputes with government regulators out of court. The companies then write off the settlements as a common business expense while appearing as though they are being punished. Jennifer Kim with the NJ public interest research group says with a lot of attention on the fiscal cliff right now lawmakers should take this seriously.

“This is just another example of how corporations are dodging paying their full taxes that again gets shifted to the New Jersey tax payers.”

Kim says that will also translate into government cutbacks.


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