In this blog post, Daniel Patrick Wendt discusses the Department of Justice's (DOJ's) use of disgorgements following the launch of its Foreign Corrupt Practices Act (FCPA) Pilot Program. While the Tenth Circuit recently defined disgorgement as "nonpunitive remedy" that "does not inflict punishment" but rather "depriv[es] the wrongdoer of the benefits of wrongdoing," the DOJ's stance on disgorgement taxation may violate this definition. "There is now a lively debate within the Internal Revenue Service over whether [Securities and Exchange Commission] SEC disgorgements in FCPA resolutions are tax deductible. The debate turns on whether the disgorgement is in fact considered remedial or punitive," Wendt said. "In the midst of this debate, a DOJ prohibition on tax deductions implies that the payment to the U.S. Treasury is a punitive remedy and meant to inflict punishment (contrary to 'nonpunitive' disgorgement). Thus, in my view, it remains worthwhile to differentiate between SEC disgorgement and DOJ disgorgement."