Monsanto manufactured pesticides that were toxic. Over the course of several years, the toxic waste contaminated the air and water around the company's plant. Several employees suffered toxic poisoning and the Environmental Protection Agency cited the company for violations. In court, the judge found Monsanto guilty and imposed fines of $30 million. The company voluntarily setup a charitable fund for the purpose of bettering the environment and funded it with $10 million. The company incurred legal expenses in setting up the foundation and defending itself in court. The court reduced the fine from $30 million to $20 million. Monsanto Chemical deducted the $10 million paid to the foundation and the legal expenses incurred. The IRS disallowed both deductions on the grounds that the payment was, in fact, a fine and in violation of public policy. Monsantos president, Albert Pujhols, has contacted you regarding the deductibility of the $20 million fine and the $10 million payment to the foundation and the legal fees. Write a letter to Mr. Pujols that contains your advice. Then write a memo for the tax files giving your advice you gave Mr. Pujols and the detailed reasoning for the advice you gave him. Monsantos address is 11222 Big Bend Road, St Louis, MO 63122 To answer this question, you must have research outside of your books. A partial list of research aids includes sections 162(a) and (f) and reg. section 1.162-21(b). To get the full 50 points you need to find a similar case with a similar situation to support your response. You should cite your work in the documents you provide. When you are completed, you should have 2 separate word documents, one for Mr. Pujols and one for the file.