IRS And SEC Have Contrary Views On Disgorgement

From Law 360
On May 6, 2016, the IRS released a chief counsel advice[1] stating that disgorgement payments to the U.S. Securities and Exchange Commission in a corporate Foreign Corrupt Practices Act enforcement action are not tax-deductible. The corporate taxpayer in the CCA allegedly violated the internal controls and books-and-records provisions of the Foreign Corrupt Practices Act. The taxpayer entered into a consent agreement with the SEC that required it to pay disgorgement for the profits gained as a result.
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