WASHINGTON, D.C. – Historic tax reform legislation passed by the House and Senate this week includes language advocated for by Congressman Brian Fitzpatrick (PA-08) to prohibit the deductibility of legal settlements related to sexual assault and sexual harassment as business expenses. The measure mirrors H.R. 4495, the Settlement Tax Deductions are Over for Predators Act (STOP Act), which Fitzpatrick originally sponsored.

“Whether it’s Hollywood, Congress or a corporate boardroom, there is no place for sexual abuse or harassment in the workplace. Just as I’m committed to protecting taxpayer dollars from being misused in Washington to cover up sexual misconduct allegations, I’m also committed to preventing private sector businesses from using tax breaks to sweep these heinous acts under the rug,” said Fitzpatrick at the time. “This Congress must stand with the victims of this harassment and take swift action to root out those who would sexually harass any other person, regardless of position or title.”

Under previous tax law, companies could deduct as ordinary and necessary business expenses any legal settlements, fines, fees, and expenses related to sexual assault and sexual harassment cases. In allowing businesses to write off these expenses, the American taxpayer is effectively subsidizing the cost of resolving legal issues related to sexual misconduct. The language included in the Tax Cut and Jobs Act would prohibit deduction of these expenses in cases where the allegations are public or in cases involving a non-disclosure agreement.

Fitzpatrick has been a leader on efforts to end the culture of corruption in D.C., including:

• Cosponsoring the Congressional Accountability and Hush Fund Elimination Act [HR 4494] - bipartisan legislation seeks to prevent sexual harassment/assault within the Congress, empower survivors, and eliminate the congressional hush fund that is currently being used to settle such claims with taxpayer money. To those ends, this legislation will:
  1. prohibit the use of public funds to pay settlements or awards for sexual harassment or assault claims;
  2. disclose all payments previously made by the Office of Compliance on its website (the name of the victim is expressly prohibited from being disclosed);
  3. require perpetrators to reimburse the taxpayers with interest;
  4. prohibit nondisclosure agreements as a precondition to initiate procedures to address sexual harassment or assault claims; and
  5. permit victims of sexual harassment or assault to make public statements about their claim, regardless of any previously signed nondisclosure agreement.
• Leading a bipartisan letter from the Freshman class to the Ethics Committee calling for a complete investigation into the misuse of taxpayer dollars for sexual misconduct settlements, including releasing the names of those members involved. Read the letter HERE
• Calling for an Ethics investigation into Congressional Sexual Assault Settlements
• Cosponsoring the ME TOO Congress Act [H.R. 4396] – legislation which would set definitive criteria to address sexual harassment in all national legislative branch offices. The bipartisan bill would reform the Congressional Accountability Act of 1995 procedures for investigating and resolving allegations that legislative branch employing offices violated the rights and protections provided to their employees, including protections against sexual harassment. The bill would ensure that such protected rights are extended to interns, fellows and whistleblowers in Congress. 
• Cosponsoring the Congressional Education About Sexual Harassment Eradication Resolution [H.Res. 604] – legislation that would require Members of the House, congressional staff, and other employees of the House to complete sexual harassment prevention and response training every year, and then file a certification of completion with the House Committee on Ethics.