JPMorgan has reached a tentative agreement with the U.S. Justice Department to pay a record-setting $13 billion in fines. While negotiations are still ongoing, $9 billion of this penalty is expected to go to the government, while $4 billion will go to the Federal Housing Finance Agency to allegedly end up in the hands of customers who were swindled by the bank.

Yet, JPMorgan may be able to write off a huge swath of these expenses.

"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," Kim Dixon and Brian Faler of Politico write. "Those payments labeled compensatory or for restitution are more likely to be deductible."

"I think it's a safe bet that a substantial portion of the deal will be deductible," Dean Baker, co-director of the Center for Economic and Policy Research, told Common Dreams.
https://www.commondreams.org/headline/2013/10/23-8