Lawyers negotiating significant settlements while ignoring tax considerations are taking a very expensive risk.  During litigation, “what’s at the forefront is minimizing your liability, particularly if it’s criminal liability,” Lawrence M. Hill said during a recent presentation on the tax treatment of damages at Shearman & Sterling’s New York office, where he is a partner.  “But the numbers are big enough, tax-wise, that it’s not something you should just be thinking about after the fact,” he warned.  In a two-part series, the Anti-Corruption Report summarizes Hill’s presentation on this critical issue.  This, the first article in the series, examines and explains the law governing tax deductions of settlements and the different treatments of various types of settlements.  In the second article in the series, Hill provides specific guidance on taxation of damages in practice and how a company can make its case that a settlement should be deductible.