[sbinews] KPMG on charges of tax-shelter?

  • From: sbistcbangalore@xxxxxxxx
  • To: sbinews@xxxxxxxxxxxxx
  • Date: Sat, 13 Dec 2003 06:57:17 +0500

KPMG faces tax shelter charges

REUTERS[ FRIDAY, DECEMBER 12, 2003 10:06:37 PM ] 
NEW YORK : US regulators have accused accounting firm KPMG LLP of stalling an 
Internal Revenue Service probe by hiding the full extent of its role in 
creating dubious tax shelters for clients. 

KPMG’s actions “demonstrate a concerted pattern of obstruction and 
non-compliance, threatening the integrity of the IRS examination process,” the 
US Justice Department alleged in a filing in US District Court in Washington on 
Monday. The filing was tied to a lawsuit by the Justice Department against 

KPMG said Thursday it has complied with all of the laws at the time related to 
tax shelters. KPMG has increasingly come under fire for what regulators view as 
questionable tax advice provided to wealthy clients. In recent months federal 
regulators and Congress have launched investigations, while disgruntled former 
clients have sued. 

The government accuses KPMG of delaying the IRS probe by handing over documents 
in an untimely fashion and hiding its tax shelter activities by refusing to 
register potentially abusive tax shelters with the IRS. It also alleged that 
KPMG hid its role in promoting a specific tax shelter that was listed by the 
IRS as potentially illegal until after KPMG learned that the IRS knew about it. 

The Justice Department also said the firm’s argument that it did not push tax 
shelters was an “illusion.” 

“KPMG has long known that the IRS had issued summonses seeking information 
about transactions that (the IRS) has ‘listed’ as potentially abusive tax 
shelters,” the filing said. “Nevertheless, KPMG continues to assert — contrary 
to literally volumes of evidence in its own files — that it has never 
developed, sold or promoted a tax shelter.” 

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