Stephens V. Commissioner, 93 TC 108 showed that any payment labeled ‘restitution’ or ‘punitive’ is non-deductible as an expense. If the payments are labeled ‘compensatory’ then in order for the payment to be a deductible expense the question of whether the ‘compensatory’ expense was ordinary and necessary would need to be addressed. So basically if…Details
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Read about some of John’s more memorable experiences navigating the conflicting sections of the Internal Revenue Code.