Something to consider from an email I received from a friend:
"After 11,000 of you emailed the Department of Justice and urged it not to let BP claim its upcoming settlement over the Gulf oil spill as a tax deductible business expense, we called to see what the DOJ had decided.
The lawyers on the case seemed annoyed that we would ask.
What is the problem here? Two years ago the world watched in horror as BP struggled to contain the disaster, and their culpability is not in doubt. So why shouldn't they pay the full value of the settlement? If the Justice Department doesn't see it that way, we need to speak with their boss.
Tell President Obama that his Department of Justice should make BP pay for its own mistakes.
As if the horrendous human and environmental costs of the oil giant's negligence weren't enough, we could end up paying for BP's settlement, too.
American taxpayers have already picked up the tab for half of the $20 billion restitution fund BP set up to compensate Gulf residents and businesses. BP claimed $10 billion in tax credits for expenses related to the spill.
When a corporation pays a fine, it's not allowed to deduct the cost as a business expense for tax purposes. But, if they settle the case instead, BP can write off those costs unless expressly prohibited by the terms of the settlement.
It's likely that this case will settle, and if the sum is tax-deductible, we could lose as much as 35 cents of every dollar BP is supposed to pay for its misdeeds. The public will pay by covering the lost revenue in the form of higher taxes, cuts to public programs or increased debt.
It doesn't have to be this way. Two years ago, the SEC required that its $535 million civil penalty agreement with Goldman Sachs not be deductible. Like the SEC, the Department of Justice can prohibit BP from deducting the expense of the settlement.
But so far, they haven't promised anything.
Call on President Obama to make sure American taxpayers don't pay—again—for BP's misdeeds.
Sincerely,
Brad Ashwell
Florida PIRG Legislative Advocate
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