Maybe I’m cursed by profession but I personally have no problem with the artful (from a tax standpoint) structuring of a civil settlement in such a way that maximizes related tax deductions thus minimizing future tax liability. Other folks are not so happy however:
BP could get billions in tax breaks on oil spill settlement ~ Jennifer Larino
The reason cited in the story is that BP admitted to criminal charges, which ironically, can actually enhance the probability that certain spill related professional fees like the lawyering can be deducted under IRC Section 162(a). I can’t talk specifics from my own tax practice but here is an interesting blurb reprinted from the M&A Tax Report circa 2002:
Deducting Legal Fees for Criminal Defense ~ Robert Wood
It is a fairly complex area but when it comes to criminal racketeering, the answer is usually yes, especially if the defendant is convicted. Accardo v. Commissioner of Internal Revenue, 942 F.2d 444 (7th Cir. 1991) is an interesting case to learn where the IRS and the 7th Circuit made the cut in denying an attorney fees deduction for the successful defense of a criminal RICO prosecution:
This is where the paradox noted above creeps into the picture. The Commissioner (Br. 16) concedes that those defendants who were found guilty as a result of the same RICO prosecution could properly claim a deduction for legal fees under Section 162(a) “as expenses paid or incurred * * * in carrying on any trade or business,” because they were found to be engaged in the racketeering business. Section 162(a) does not draw any distinction between legitimate and illegitimate business enterprises. But since the jury acquitted taxpayer of involvement in the racketeering business, he could not claim a Section 162(a) deduction….
I imagine E&Y was consulted as the settlement was being drafted, in fact I’d rate it that as a certainty based on the after the fact chatter from the public interest groups.
11 thoughts on “BP set to deduct billions in coastal restoration payments from its US taxes…”
SRHS Trustee Allen Cronier to resign from board, cites health issues
Two down five to go. A complete cleansing is in order. They act like a secret society that answers to no one and are not held responsible for their actions.
Question: Has anyone seen the calculations performed for SRHS before and leading to the decision to lock enrollment into the defined benefit plan and not enroll new hires?
Certainly such calculations should have been performed at that time to evaluate the need for and impact for the changes.
If there were projections used in making the decision to close enrollment then why hasn’t this fact (and the calculations) been released? Has Stacy Pickering spirited them off to Jackson just like the DMR records? Or is it the upcoming election which impeded the transparency?
One more thing: the projection shows that SRHS pays into the fund as follows:
2015 $0.00 (JCBOS didn’t approve the budget?)
2016 through 2019 $1,200,000.00 per year
2020 through 2031 $3,000,000.00 per year
Balloon payments begin
Similar payments are projected to continue through 2050, when the amount begins to decline.
This simulation seems to be offering the retirees a plan financed to a significant degree by promises akin to zero coupon junk bonds with a average maturity in the neighborhood of 30 years.
Sun Herald posts Cronier’s resignation letter and the press release.
Is there another Cronier letter of resignation other than the one the Sun Herald has posted?
Allen Cronier has submitted his letter of resignation today from the Singing River Hospital Board of Trustees, after 13 years of service citing the battling of multiple health issues.“In his letter to the Singing River Board of Trustees Cronier stated: “I feel that a lot of progress has been made in the Board’s efforts to find solutions to the issues taking place at Singing River.”
Source for the above quote: Sun Herald link.
The above quotation does not appear in the Cronier letter of resignation addressed to the SRHS BOT, and cc’d to Supervisor Cumbest that can be viewed at the Sun Herald link.
BP may be deducting billions in their tax filings but the Jefferson Parish Council is set to vote today on receiving a ONE BILLION settlement from BP.
Do you think the Council will be voting YES or what? Can you image how many proposed political crony contracts the Council will dream up to spend that money which should be only used to restore our wetlands or erect inland levees so the populated neighborhoods on the westbank of the Parish will never be flooded ( and I am NOT talkin’ Lafitte which is indefensible).
You got bad info there, Locke. Indeed, neighboring Plaquemines Parish with all its claims was offered chump change.
Empire: Satanic Tammany Parish was reported receiving a proposed 16 Million and BP oil never touched any shore or industry of their parish.
You say Jefferson Parish is not getting 1 billion then the media /channel which quoted that amount is in error cause I didn’t just pull such an eye opening dollar amount out of the air.
Quite true, Locke. To give you some flavor, it is understood that Plaquemines Parish would get between ten to twenty million.
And no doubt the full import of the settlement has not sunk in as to the fact that BP will pay in full attorney fees. Now THERE’S the scam which the Slabbed Nation no doubt will find interesting when the amounts are disclosed.
Caldwell may believe he has funded his re-erection [pun intended] from the Calhouns of Louisiana, but that appears doubtful. In any event, this is a deal whereby BP essentially has a long term cost of doing business with little true loss.
And when the BP money trickles down to Mississippi, by the time the lawyers, cronies, politicians and hanger ons get their share, there will be little left for restoration. It has already started!
Barbour wants it to go to the failed Gulfport Port deal to dredge, etc. It hasn’t created any jobs in 10 years but lost positions. Wonder why?
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