For Immediate Release

Contact: Kyle Huwa, 202-225-4676

Washington, D.C. – Today, Congressman Ken Buck offered an amendment to H.R. 1, the Tax Cuts and Jobs Act, prohibiting tax subsidies for legal settlements related to sexual assault or sexual harassment.

“America has been watching Hollywood for decades, but not watching closely enough. Behind the red carpets and glitzy premieres is a culture of deceit and depravity. As Congress rethinks our tax code, we need to rethink the way we treat Hollywood by eliminating the business expense deduction for hush money associated with sexual assault and sexual harassment cases,” stated Congressman Ken Buck.

When companies pay settlements and legal fees in the regular course of their business, these costs can typically be written off as ordinary and necessary business expenses. In allowing these businesses to expense the cost of resolving legal issues, the tax code makes it less financially costly for the business to engage in or allow activity that draws lawsuits. In Hollywood, this means that when companies settle a sexual harassment or sexual assault case and then deduct that settlement from their tax liability, the American taxpayer effectively subsidizes those companies’ costs of covering up the illegal behavior.

Rep. Buck’s amendment would eliminate business expensing for legal settlements, fines, fees, and legal expenses associated with sexual assault and sexual harassment.

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