Tax News: Toyota’s Settlement for the Sudden Acceleration Case is Not Tax Deductible

Similar to the settlement with  JP Morgan over the Madoff ponzi scheme, once again the Department of Justice has announced a settlement under a deferred prosecution agreement will not be tax deductible.  This time it is Toyota that will not be able to have the taxpayers help fund its problems.  Toyota was under investigation for misleading acts related to the accidental acceleration problems.  The settlement with the Department of Justice contained a provision that made Toyota specifically state they would not try to receive any tax benefit or deduction from the imposed settlement payment.   With a settlement payment of $1.2B and a tax rate of 35%, absent this agreement Toyota may have been able to push over $400M of the payment back on the government.  Many taxpayers are happy with these recent events as it seems the government is taking an approach that it is not going to subsidize bad acts and illegal behavior.

Disclaimer: Hone Maxwell LLP articles and blogs are not intended as legal advice. Additional facts, facts specific to your situation or future developments may affect subjects contained herein. Seek the advice of an attorney before acting or relying upon any information herein.

Latest Post


12 Marina View #23-01
Asia Square Tower 2
Singapore 018961
+65 8648 3995


3465 Camino Del Rio South, Suite 400
San Diego, CA 92108


Centro Corporativo Dayco
Blvd. General Gustavo Salinas #11050
Suite 602, Col. Aviacion
22014 Tijuana, B.C., Mexico
+52 (664) 504 6415

Entering the U.S. Business Market

Download Our Free Guide

Foreign investors: Learn about options for opening a business and tax compliance in the U.S.