In this article, Lauren Briggerman, Kirby Behre, and George Hani discuss the impact of tax reform legislation on the tax deductibility of settlement payments in federal enforcement actions, and the Internal Revenue Service (IRS) response to Kokesh v. SEC. The new tax law "drastically alters the landscape" for defendants negotiating enforcement settlements with the government, the authors wrote, redefining what settlement payments can be tax deductible and limiting deductibility to only two carve-outs: restitution and amounts incurrent to come into compliance with the violated law. "The new tax law now puts the onus on settling defendants and their lawyers to convince enforcement agencies to characterise settlement payments as one of the tax law's two carve-outs permitting tax deductibility. Restitution appears to be the best path toward maximising the likelihood of tax deductibility," the authors said, but "even if enforcers agree to characterise a settlement payment as restitution, however, the IRS remains free to challenge the tax deductibility of settlement payments to government agencies."