Research Project Barrett Company manufactured chemicals that were toxic. Over the course of several years 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 Barrett guilty and imposed fines of $45 million. The company voluntarily setup a charitable fund for the purpose of bettering the environment and funded it with $25 million. The company incurred legal expenses in setting up the foundation and defending itself in court. The court reduced the fine from $45 million to $20 million. Barrett Company deducted the $25 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 Barrett's president, Robyn Barrett, has contacted you regarding the deductibility of the $20 million fine and the S25 million payment to the foundation and the legal fees. Write a letter to Mrs. Barrett that contains your advice. Then write a memo for the tax files giving your advice you gave Mrs. Barrett and the detailed reasoning for the advice you gave him. Barrett's address is 200 Lincoln Center, Omaha, NE 68182 To answer this question, you will need to do research outside of your book. A partial list of research aids include: section 162(a) and (1) and reg. section 1.162-21(b). You should cite your work in the documents you provide