The Seventh Circuit yesterday affirmed the Tax Court (T.C. Memo. 2008-236 (Oct. 27, 2008)) in denying a current deduction to WellPoint for $113,837,500 paid to settle lawsuits brought by Connecticut, Kentucky, and Ohio challenging its acquisition of Blue Cross Blue Shield insurance companies in those states, as well as $827,595 in legal fees, as “ordinary and necessary” business expenses under § 162(a) and instead required the expenses to be capitalized. WellPoint, Inc. v. Commissioner, No. 09-3163 (7th Cir. Mar. 23, 2010) (Posner, J.).
