Seward & Kissel attorneys Brett Cotler and Andrew Jacobson co-authored an article for the April 11, 2022 issue of Tax Notes International. The article is titled, “The Taxation of Ransom Payments in Canada and the US.”

In the article, the authors examine the treatment of ransomware payments by Canadian and U.S. tax authorities and explain their potential tax and legal implications for taxpayers in both countries, as well as the U.S. sanctions and other regulatory risks for making ransomware payments. Key takeaways include:

• Although U.S. taxpayers may be able to deduct ransom payments for U.S. federal income tax purposes, the specific facts and circumstances of any ransom payments should be evaluated on a case by case basis.
• In the U.S., ransomware payments have come under increased scrutiny by U.S. regulators, including as it relates to risk under U.S. sanctions and anti-money laundering laws.

To access the article on the TaxNotes portal, please click here. Please note, a subscription is required to view this website.

If you have any questions or would like additional information, please reach out to Brett Cotler or Andrew Jacobson.