Elizabeth Warren promised to fight for Americans and is following through on her campaign promise!
Massachusetts should be proud we elected Senator Warren!
Thank you for contacting me about the tax
treatment of corporate settlement payments to the federal government.
As you may know, JPMorgan and the U.S.
Department of Justice agreed to a settlement in November 2013 over the sale of
troubled mortgages. DOJ announced that the total value of the settlement was
approximately $13 billion. It turns out, however, that as much as $11 billion
of the settlement amount is tax deductible - potentially reducing what JPMorgan
might actually pay by more than $4 billion.
The
JPMorgan example is not unique. Federal enforcement agencies routinely tout
large dollar figures in settlement agreements - figures that may be
significantly reduced by tax deductibility, credits for routine activity, and
other fine print.
These federal enforcement agencies are
supposed to work for the public - not for the companies they regulate.
Settlement agreements with corporate wrongdoers should be tough, fair, and free
of these sorts of loopholes. That is why I have co-sponsored S.1654, the
Government Settlement Transparency and Reform Act, which would limit the
circumstances in which settling companies can claim tax deductions for
government settlements.
At a minimum, if the agencies are confident
that these settlements are a good deal for the American people, they should be
willing to publicly disclose key terms and conditions. That is why I recently
introduced the bipartisan Truth in Settlements Act with my colleague, Sen. Tom
Coburn (R-OK). Our legislation would require regulatory agencies to clearly
disclose the key terms and conditions of settlement agreements to the public --
including the potential tax treatment of any settlement payments -- instead of
hiding unflattering details in the fine print. Such increased transparency can
help shut down backroom deal-making and ensure that settlements truly benefit
the public interest.
I appreciate your reaching out to my office,
and I will be sure to keep your comments in mind as I continue to work with my
colleagues on this issue.
Sincerely,
Elizabeth Warren
United States Senator
United States Senator
Washington,
DC 317 Hart Senate Office Building Washington, DC 20510 Phone: 202-224-4543 |
Boston, MA 2400 JFK Federal Building 15 New Sudbury Street Boston, MA 02203 Phone: 617-565-3170 |
Springfield,
MA 1550 Main Street Suite 406 Springfield, MA 01103 Phone: 413-788-2690 |
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