JPMorgan Fine Revealed As Even Weaker Slap On Wrist
Buried in the weekend “news cycle” was the rather significane news that JPMorgan had agreed to pay the Department of Justice $13 billion to settle most (but not all) investigatiuons into the investment bank’s crooked mortgage practices that helped trigger the financial crisis. When the news broke, this writer considered it a slap on the wrist. Well, more information has emerged that make the arrangement look like a slap on the wrist with a wet noodle:
Details of the pact are now being finalized, but it is expected to include $9 billion paid to the government and $4 billion in relief for wronged customers.
The silver lining for JPMorgan: The bank will likely be able to write off a good chunk of those funds by calling them business expenses, tax experts said.
Section 162(f) of the tax code bars deductions for fines and penalties paid to the government, but JPMorgan might be able to negotiate an agreement to classify the payments as something else. Those payments labeled compensatory or for restitution are more likely to be deductible.