are settlement fees deductible

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Subject Author Date are settlement fees deductible removeps-groups@yahoo.com 09-10-2009
Posted by removeps-groups@yahoo.com on September 10, 2009, 12:04 am Please log in for more thread options This year I'm getting lots of class action settlement forms. Big companies are being sued for all sorts of things -- not disclosing their hidden fees or their monthly fees, recording your calls without your consent, etc. So I'm wondering if the amounts the companies pay is deductible to them. Section 162(f) says: (f) Fines and Penalties - No deduction shall be allowed under subsection (a) for any fine or similar penalty paid to a government for the violation of any law. So if the payment is made to customers, I imagine it would be deductible. But not if the payment is made to the US, any state, or any foreign government. I did find an interesting article at http://www.cfo.com/article.cfm/12542705/c_12539422?f=TodayInFinance_Inside. What if the payment is made to lawyers? Is it deductible then? What if the payment is a coupon? Like $20 of your next order, expiring in June/30/2012. One would imagine the coupon reduces the revenue, so the revenue will just be reduced, and there is no writing off of the settlement payment regardless of whether the company is on cash or accrual basis. -- << ------------------------------------------------------- >> << The foregoing was not intended or written to be used, >> << nor can it used, for the purpose of avoiding penalties >> << that may be imposed upon the taxpayer. >> << >> << The Charter and the Guidelines for submitting posts >> << to this newsgroup as well as our anti-spamming policy >> << are at www.asktax.org. >> << Copyright (2007) - All rights reserved. >> << ------------------------------------------------------- >> Similar Threads Posted 1099-Misc for reimbursed attorney fees in out of court settlement February 10, 2009, 12:46 pm Cost basis when selling a house - settlement fees and closing costs June 11, 2009, 10:16 am Attorneys Fees - Deductible? October 16, 2008, 10:35 am Are broker advisory fees "deductible"? March 30, 2009, 5:03 pm Medical Board Certification - are fees deductible? April 29, 2009, 12:34 pm Are legal fees for immigration (employer-sponsored) tax deductible? January 21, 2008, 6:24 am Received settlement for Iridium Securities Litigation settlement. IRA tax implications? November 15, 2009, 1:08 pm Entrance Exam Fees and Application Fees as Deductions 2006 January 19, 2007, 8:06 pm Lump settlement from business contract settlement December 13, 2006, 10:38 pm Claim settlement ? ? ? November 14, 2007, 1:39 pm