In addition, you will now receive a 25% reduction to all karma penalties; for example, opening a lost suitcase will cost 6 karma, not paying your taxes takes 45 karma and things which cost you 1 karma, such as the "stings of conscience" when pickpocketing, bashing people awake, and getting some tail will no longer have any karma hit as the game truncates -0.75 to -0. As of 1.14, nuking a city is a special case, and will only cost 15 karma with the feat active (actually 20, but the treasure further reduces it to 15).
Having this feat does not affect gaining karma except for the the lowered maximum karma.
Since you receive 5, 10, and 15% discounts on taxes at 10, 15, and 20 karma respectively, if you would like to save on cash then you might want to reconsider using this item. If you regularly do karma-reducing actions, though, then you probably never managed to keep your karma level at those levels anyway.
Obtained from the Red Blossom in Palmia quest.
In Elona+, Noel the bomber rarely drops this upon her death, but only if you've already completed the above quest.
In versions prior to 1.14, the feat gained from the secret treasure of the wicked only has a -10 maximum karma hit.