The Department of Justice yesterday released the testimony of Deputy Attorney General Paul J. McNulty before the Senate Armed Services Committee. McNulty explained the DOJ’s "tax neutral" approach in the $615 million Boeing settlement and the IRS’s role in the settlement:
[T]he Department’s policy of remaining tax neutral – a longstanding policy established in consultation with the IRS and recommended by the GAO [Systematic Information Sharing Would Help IRS Determine the Deductibility of Civil Settlement Payments (Sept. 15, 2005) (05-747)] – is sound. That policy leaves civil fraud issues to the Government’s fraud experts and the tax implications of any settlement (often unknowable during negotiations) to the Government’s tax experts. I firmly believe that ultimately, this policy is the only appropriate way to handle these matters, the most efficient to resolve both civil fraud cases and the tax ramifications of those cases, and the most beneficial to the American taxpayer.
Prior TaxProf Blog coverage:
