Question

Is it ethical for companies to be able to write-off verdicts or settlement awards on their corporate taxes? Please explain why or why not.

Answer 1

Yes it is ethical in my view because the amount paid in litigation is nothing but a payment which should have been made earlier by the company, but instead they did not paid it until the Courts order. It is a business expense any way and needs to be deducted as per prevalent tax laws. Litigation expenses are a part and parcel of every business and can constitute a large part of their annual expense, as a relief also to the party at default it should get deduction for business expense incurred.

Hope this helps.