Thanks to all for replying 

I am going to take the amount of restitution that was withdrawn from the Scorp as a deduction on the s corp return. The lawyer and documentation indicate that this payment was restitution for over billing Medicare , Medicaid, insurance companies, etc. Through the advice of the community I did some further research and found an article in the national law review that states that restitution is a deductible business expense. The form 1098-f indicates the amount of restitution.

I am going to only take the restitution which was withdrawn from the business. No the total of the restitution paid on the 2 1098-f forms.

I would appreciate any thoughts on how I’m handling this. Thanks again