Compensatory Settlement Payments in False Claims Act Cases are Deductible.

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Last week, the First Circuit ruled on the tax treatment of settlement payments in a False Claims Act case, sustaining a jury verdict awarding a taxpayer a tax refund based upon a portion of the settlement payments that it made that exceeded the single damages suffered by the government. The court rejected the government’s contention that the payments could only be deducted as business expenses if the government agreed to that treatment.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© James R. Malone, Jr., MALONE LLC | Attorney Advertising

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