New IRS rulemaking impacts FCA settlement payment deductibility
Effective January 14, 2021, the Internal Revenue Service (“IRS”) implemented a final rule (the “Final Rule”) concerning the tax deductibility of settlement payments made to the government. This rulemaking followed a legislative update to the Internal Revenue Code of 1986 (“IRC”), which was implemented as part of the 2017 federal tax overhaul and specifically included a prohibition against deducting certain settlement payments. Relative to the IRS proposed regulations released in May 2020 (the “Proposed Rule”),…