Baldwin Challenges Opioid Companies ‘Abusive’ Tax Deductions
Letter from senators to IRS warns of deductions for legal expenses due to companies role in opioid epidemic.
Sen. Tammy Baldwin has joined other Senate colleagues in calling on the Internal Revenue Service (IRS) to challenge tax deductions by opioid companies which the senators have called “abusive.” Such deductions could stem from settlements opioid companies have paid because of their role in the opioid epidemic.
Signed by 12 elected officials, including Baldwin, the letter notes that four companies involved in a multi-district opioid litigation plan to claim billions in tax deductions for expenses related to a pending $26 billion settlement. “Similarly, in 2019, a judge ordered one of these companies to pay $572 million to the state of Oklahoma for misleading marketing of its opioid products. Based on this reporting, we are concerned that opioid wholesalers and drug companies may mischaracterize legal settlement expenses in order to claim tax deductions under tax code section 162(f), which allows the deduction of restitution payments.”
The letter continues, “we strongly encourage the IRS to fully enforce the tax code by challenging any erroneous interpretations of these recent regulations that opioid companies may use in an attempt to claim tax deductions for legal settlement expenses.” The letter is the latest in series of actions Baldwin and others have taken against top opioid companies, which have fueled the opioid crisis.
Reprinted with permission of Wisconsin Examiner.
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