The Homeland Security and Governmental Affairs Committee approved the Truth in Settlements Act of 2014 (S. 1898) by unanimous consent. Under Section 162(f), a fine or similar penalty paid to a government for the violation of any law may not be deducted as an ordinary and necessary business expense. Regulations provide that Section 162(f) also covers payments made in settlement of a taxpayer’s actual or potential liability for a fine or penalty. The bill would require settlement agreements over $1 million to designate how much of the settlement is attributable to actual or potential liability for a fine or penalty, and is thus not deductible. The bill would also require such settlement agreements to be made publicly available, and would require public companies to disclose any claim of a tax deduction relating to a payment under a covered settlement agreement in securities filings.