Newsweek Quotes Mark Allison: Settlements Are Tax Write-Offs for Banks

Newsweek quoted Mark D. Allison concerning the tax deductions for settlements imposed on banks and lenders involved in causing the 2008 financial crisis. For the complete article, please visit Newsweek's website.
 
Excerpt taken from the article.

"Truth in Settlements" legislation that has been proposed in the House and Senate would force the Justice Department and other federal agencies to disclose hidden tax deductions in settlements and whether total numbers are inflated for "credits" that can be offset in other areas. "When government agencies reach settlements with companies that break the law, they should disclose the terms of those deals to the public," Senator Elizabeth Warren, a co-sponsor of the Senate bill who chaired a congressional oversight panel for the bailout, tells Newsweek.

The Justice Department hasn't always been shy about forbidding tax deductibility. Just look at the hefty, nondeductible bills slapped in recent years on big Swiss banks like UBS and Credit Suisse for their role in selling offshore tax-evasion services to wealthy Americans. Or on BP for its role in the Deepwater Horizon oil spill. When it comes to dealing with the Justice Department, it plainly pays to be American.

"There are very large outlier cases that have so much public attention that the notion that they would give a substantial tax benefit might be viewed as quite inappropriate," says Mark Allison, a corporate tax lawyer at Caplin & Drysdale.