The historic tax reform legislation passed by the House and Senate this week includes language advocated by Bucks County Congressman Brian Fitzpatrick, in prohibiting the deductibility of legal settlements as business expenses when related to sexual assault and sexual harassment issues.

This measure mirrors the STOP Act, Settlement Tax Deductions are Over for Predators Act, H.R. 4495. Fitzpatrick is an original sponsor of the STOP Act.

“Whether it’s Hollywood, Congress or a corporate boardroom, there is no place for sexual abuse or harassment in the workplace,” Fitzpatrick said. “Just as I’m committed to protecting taxpayer dollars from being misused in Washington to cover up sexual misconduct allegations, I’m also committed to preventing private sector businesses from using tax breaks to sweep these heinous acts under the rug,” he added.

The Congressman said legislators must stand with the victims of sexual harassment and take swift action to root out the culprits, regardless of position or title.

Under previous tax law, companies could deduct, as ordinary and necessary business expenses, any legal settlements, fines, fees, and expenses related to sexual assault and sexual harassment cases. In allowing businesses to write off these expenses, the American taxpayer is effectively subsidizing the cost of resolving legal issues related to sexual misconduct.

The language included in the Tax Cut and Jobs Act would prohibit the deduction of these expenses in cases where the allegations are public or in cases involving a non-disclosure agreement. -PW