May 17, 2017

International Business Times: How Much Do Companies Really Pay When Settling With The Government? Warren Pushes Bill That Makes It Public

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While is doesn’t strive for a reform in the tax system that allows those firms to write off huge chunks of their fines, the senators’ measure, which applies to settlement agreements with executive agencies worth at least $1 million, requires the agency in question to “make publicly available in a searchable format” a list of those agreements, including the amount of the penalty the payer can’t deduct. If that settlement amount is kept confidential, the agency has to state, publicly, why it should be kept secret. And lastly, the bill requires executive agencies to report information on the settlements they reach each year.

Matthew Gardner, a senior fellow at the Institute on Taxation and Economic Policy, said he saw the law as a sensible starting point in an effort to clarify big-number fines that are often no more than “window dressing.”

“That seems like a pretty straightforward ask,” he said. “The dual goal ought to be more certainty and more transparency.”

Still, Gardner added, a tax code that allows those firms to deduct enormous amounts of what could be government revenue merited some attention as well — that, or the agency charging the fine should take the expected write-off into account when deciding on a number. But either way, he said, the Warren-Lankford bill should make that task a little easier. Read more