Sub Atomic
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Mon Jul-12-04 10:36 AM
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What happens to the money when a corporation is fined? |
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Does it go into the general fund or a specified account?
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StayOutTheBushes
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Mon Jul-12-04 10:37 AM
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Frodo
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Mon Jul-12-04 10:38 AM
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2. You need to be more specific. |
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It depends on the type of "fine".
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Sub Atomic
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Mon Jul-12-04 10:42 AM
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4. Take the recent Bank One fine |
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http://money.cnn.com/2004/06/29/funds/fundsfire_bankone.reut/index.htmThey were recently fined $40MM and had to repay $10MM. I presume that the $10MM will go back to the customers they screwed (but will it really?). But what happens to the $40MM?
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Frodo
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Mon Jul-12-04 10:58 AM
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6. That's why I was asking. I don't consider that a "fine". |
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The "civil penalty" was part of a settlement.
These payments vary wildly, but in this case the money should benefit (after outrageous legal fees) the individuals who were harmed.
Sometimes this is an outright cash payment, but it could be as simple as "coupons". I got a letter re: a settlement offer from a manufacturer a year or so ago. Rather than pay me $25 (after costs and split a billion ways), I got a certificate good for $25 off any of their products. If they had actually shafted me (I'm not naturally litigious anyway) I wouldn't WANT to buy More of their merchandise. As it was, I hadn't had a problem.
I've also seen "coupon" type offers where you can get "x" in company products (discounts, freebies, whatever) or 1/3 of "x" in cash.
It all depends on the language of the settlement.
Had they been "fined" by a state banking regulator the money would go (usually) to the state. But I don't know how BankOne is chartered.
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redqueen
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Mon Jul-12-04 10:38 AM
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that they can sometimes deduct the fines, or at least a portion, from their taxes.
*sigh*
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Frodo
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Mon Jul-12-04 11:00 AM
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Anything that reduces the bottom line can reduce the tax liability.
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redqueen
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Mon Jul-12-04 11:04 AM
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If I steal from a bank, and get it taken away, can I claim that on my taxes?
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Frodo
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Mon Jul-12-04 11:10 AM
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9. Noooo. But it wasn't "income" either - was it? |
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Corporations pay taxes on their income (profit). If their income goes down so do their taxes.
Keep in mind it isn't a 1:1 ratio. They don't save $10Million on a $10M fine. They save whatever the taxes WOULD have been on that income.
It's the same for you. If you do something wrong at work and your boss docks you $100 pay. You won't be paying taxes on the $100 (which saves you - say - $25-$30). It doesn't mean the penalty doesn't hurt.
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Sub Atomic
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Mon Jul-12-04 10:53 AM
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