Recent US tax reform legislation P.L. 115-97, commonly known as the Tax Cuts and Jobs Act, made sweeping changes to when and how a taxpayer will be able to deduct payments made to settle claims of particular acts of misconduct, specifically government- and quasi-government-imposed fines and payments related to sexual harassment.

WHAT YOU NEED TO KNOW -

Government- and Quasi-Government-Imposed Fines -

..Like under prior law, taxpayers may not deduct any portion of a payment to the government that is punitive in nature. Taxpayers may still be able to deduct payments for restitution or to come into compliance with the law, but only if a new requirement of disclosing such amounts in the court order or settlement agreement has been satisfied...