Cebu_4_2
23rd October 2013, 07:57 PM
Sweet!!
Taxpayers To Help Pay JPMorgan’s Fine For Causing 2008 Financial Crisis (http://news.firedoglake.com/2013/10/23/taxpayers-to-help-pay-jpmorgans-fine-for-causing-2008-financial-crisis/)
By: DSWright (http://news.firedoglake.com/author/dswright/) Wednesday October 23, 2013 5:51 am
http://upload.wikimedia.org/wikipedia/commons/thumb/3/3f/Jamie_Dimon%2C_CEO_of_JPMorgan_Chase.jpg/755px-Jamie_Dimon%2C_CEO_of_JPMorgan_Chase.jpgJPMorgan CEO Jamie Dimon
Feeling generous? You should because you are about to help pay for JPMorgan’s $13 billion fine for causing the 2008 financial crisis. (http://news.firedoglake.com/2013/10/21/jpmorgan-to-pay-13-billion-for-causing-2008-financial-crisis/) According to tax experts the money JPMorgan will be paying to the government ($9 billion) and to wronged customers ($4 billion) can be written off as a “business expense.” In other words, JPMorgan may be sticking the taxpayers with the bill. (http://www.politico.com/story/2013/10/jpmorgan-deal-tax-breaks-98688.html)
Section 162(f) of the tax code bars deductions for fines and penalties paid to the government, but JPMorgan might be able to negotiate an agreement to classify the payments as something else. Those payments labeled compensatory or for restitution are more likely to be deductible.
“These are big numbers,” said Alan Feld, a law professor at Boston University. “I’m not sure that I as a taxpayer am so happy about helping JPMorgan to pay.”
Me either professor.
And just in case the situation was not absurd enough already, part of the $13 billion will go to the Federal Housing Finance Authority (FHFA) for bad bonds JPMorgan sold to taxpayer-backed Fannie Mae and Freddie Mac.
The FHFA sued JPMorgan and 17 other banks in 2011, alleging that the underlying loans in more than $200 billion worth of mortgage bonds sold to Fannie and Freddie were riskier than disclosed. The agency’s suit against JPMorgan covered roughly $33 billion in bonds sold between 2005 and 2007.
Steve Rosenthal, a former corporate lawyer and fellow at the Tax Policy Center, said the payments to FHFA might be interpreted either way: as penalties or as restitution. “I am guessing it is probably described in a way that allows JPMorgan to deduct,” said Rosenthal, a former legislative counsel at the Joint Committee on Taxation.
Yes, JPMorgan will pay a “penalty or restitution” to FHFA then write off that amount on its taxes. So taxpayers for a brief shining moment will be paid back before JPMorgan files their taxes and then – poof – the funds are gone again. Talk about a shell game.
What is the point of fining JPMorgan these large amounts if the taxpayer is picking up the tab?
Photo by Steve Jurvetson (http://commons.wikimedia.org/wiki/File:Jamie_Dimon,_CEO_of_JPMorgan_Chase.jpg) under Creative Commons license.
http://static1.firedoglake.com/template/fdl/images/commentBtn.gif 30 Comments (http://news.firedoglake.com/2013/10/23/taxpayers-to-help-pay-jpmorgans-fine-for-causing-2008-financial-crisis/#comments)
Taxpayers To Help Pay JPMorgan’s Fine For Causing 2008 Financial Crisis (http://news.firedoglake.com/2013/10/23/taxpayers-to-help-pay-jpmorgans-fine-for-causing-2008-financial-crisis/)
By: DSWright (http://news.firedoglake.com/author/dswright/) Wednesday October 23, 2013 5:51 am
http://upload.wikimedia.org/wikipedia/commons/thumb/3/3f/Jamie_Dimon%2C_CEO_of_JPMorgan_Chase.jpg/755px-Jamie_Dimon%2C_CEO_of_JPMorgan_Chase.jpgJPMorgan CEO Jamie Dimon
Feeling generous? You should because you are about to help pay for JPMorgan’s $13 billion fine for causing the 2008 financial crisis. (http://news.firedoglake.com/2013/10/21/jpmorgan-to-pay-13-billion-for-causing-2008-financial-crisis/) According to tax experts the money JPMorgan will be paying to the government ($9 billion) and to wronged customers ($4 billion) can be written off as a “business expense.” In other words, JPMorgan may be sticking the taxpayers with the bill. (http://www.politico.com/story/2013/10/jpmorgan-deal-tax-breaks-98688.html)
Section 162(f) of the tax code bars deductions for fines and penalties paid to the government, but JPMorgan might be able to negotiate an agreement to classify the payments as something else. Those payments labeled compensatory or for restitution are more likely to be deductible.
“These are big numbers,” said Alan Feld, a law professor at Boston University. “I’m not sure that I as a taxpayer am so happy about helping JPMorgan to pay.”
Me either professor.
And just in case the situation was not absurd enough already, part of the $13 billion will go to the Federal Housing Finance Authority (FHFA) for bad bonds JPMorgan sold to taxpayer-backed Fannie Mae and Freddie Mac.
The FHFA sued JPMorgan and 17 other banks in 2011, alleging that the underlying loans in more than $200 billion worth of mortgage bonds sold to Fannie and Freddie were riskier than disclosed. The agency’s suit against JPMorgan covered roughly $33 billion in bonds sold between 2005 and 2007.
Steve Rosenthal, a former corporate lawyer and fellow at the Tax Policy Center, said the payments to FHFA might be interpreted either way: as penalties or as restitution. “I am guessing it is probably described in a way that allows JPMorgan to deduct,” said Rosenthal, a former legislative counsel at the Joint Committee on Taxation.
Yes, JPMorgan will pay a “penalty or restitution” to FHFA then write off that amount on its taxes. So taxpayers for a brief shining moment will be paid back before JPMorgan files their taxes and then – poof – the funds are gone again. Talk about a shell game.
What is the point of fining JPMorgan these large amounts if the taxpayer is picking up the tab?
Photo by Steve Jurvetson (http://commons.wikimedia.org/wiki/File:Jamie_Dimon,_CEO_of_JPMorgan_Chase.jpg) under Creative Commons license.
http://static1.firedoglake.com/template/fdl/images/commentBtn.gif 30 Comments (http://news.firedoglake.com/2013/10/23/taxpayers-to-help-pay-jpmorgans-fine-for-causing-2008-financial-crisis/#comments)