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the 787.5 million settlement that Fox News has agreed to pay in the historic defamation case from Dominion voting systems as a blockbuster number by any measure but when all is said and done the chances that the right-wing network will end up absorbing the full cost is highly unlikely heres why settlement payments are tax deductible if the company pays out of pocket when you run a business much if not all of what you spend is considered a business expense that includes the money you spend to defend the company in civil lawsuits that threaten to tarnish the company brand or otherwise harm its ability to make money in the future for income tax purposes those expenses are deductible assuming the company is not reimbursed for them by anyone else and assuming the money isnt going to pay fines or a penalty to the government in which case a deduction would be disallowed in Foxs case a trial may have further harmed its reputation so settling the case likely made the most economic sense this