Why does the federal tax law disallow a business deduction for a fine or penalty paid to any government?

Multiple Choice

• A deduction for the payment of a fine or penalty would be a subsidy for bad behavior and also against public policy.

• A deduction for the payment of a fine or penalty would distort the measurement of taxable income.

• The payment of a fine or penalty is not an expense for financial reporting purposes.

• The payment of a fine or penalty is not an ordinary business expense.