there is a proposal in the Obama 2013 budget to curtail this practice.
Under the Income Tax Act Canadian companies enjoy the same dubious privilege, but I am aware of no movement in this country to make corporate wrongdoers pay the full price of their transgressions. When the payments are made to satisfy punitive damages awards, it is hard to formulate a justification for this windfall.
I can understand why this is not an issue that is galvanizing the public (tax policy is about as compelling a debate topic as staples versus paper clips) but in these times when federal budgets are stretched thin you would think an opportunity to close an undeserved tax loophole would beckon invitingly to our federal leaders.
My personal financial interests actually argue in favour of the status quo : any reform would likely cause corporate wrongdoers to be that much more resistant to compensating their victims. However that is a modest sacrifice I'd be prepared to make to see a more just tax treatment of payments made necessary purely by corporate high-handedness or corruption.
Marc's Ottawa litigation practice areas include elder abuse, financial advisor negligence, personal injury including motor vehicle accidents and slip and fall accidents, lawyer negligence, commercial disputes, medical and dental malpractice, insurance claims disputes, real estate disputes, accident benefits litigation, LTD litigation, wrongful dismissal, coverage disputes, pension litigation, bank and trust company negligence, product liability, representing victims of financial fraud, and sexual harassment. This blog article is for informational purposes only and does not constitute legal advice.