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Fraudulent Tax Shelters - KMPG Goes Down Hard
In the largest criminal tax case ever filed, KMPG has copped a plea to using fraudulent tax shelters to bilk the government out of 2.5 billion dollars. KMPG has agreed to pay a fine of $456 million dollars, but nine of its executives still are under indictment. Son of Boss Tax Shelters From 1996 to 2003, KMPG promoted a tax strategy known as the Son of Boss. This shelter was used to create phony tax losses that could be claimed by wealth individuals looking to write off tens of millions of dollars. KMPG promoted the structure despite the fact it's own internal tax attorneys warned the structure was fraudulent and could result in criminal charges. So far, wealthy individuals participating in the scheme have paid over $3.7 billion dollars to the IRS. There should be no mistaking the impact of the plea agreement in this case. KMPG may have enjoyed the huge fees earned from the scam, but it is paying an incredible price for pursuing this practice. The price paid includes: 1. 456 Million Dollar Fine, 2. Permanently barred from providing tax services to wealthy individuals, 3. Permanently barred from involvement in any pre-packaged tax strategies, 4. Permanently barred from charging a contingency fee for work, 5. All actions monitored by government appointee for three years, 6. Full cooperation with government in indictments of individual KMPG employees. Remaining Indictments While KMPG pled guilty, it left its employees out to dry. An interesting maneuver since one can assume KMPG enjoyed the millions of dollars produced from the fraudulent tax shelters. Those under indictment, who are all now former employees, are: 1. Jeffrey Stein, former Deputy Chairman of KPMG, former Vice Chairman of KPMG in charge of Tax and former KPMG tax partner; 2. John Lanning, former Vice Chairman of KPMG in charge of Tax and former KPMG tax partner; 3. Richard Smith, former Vice Chairman of KPMG in charge of Tax, a former leader of KPMG's Washington National Tax and former KPMG tax partner; 4. Jeffrey Eischeid, former head of KPMG's Innovative Strategies group and its Personal Financial Planning Group and former KPMG tax partner; 5. Philip Wiesner, former Partner-In-Charge of KPMG's Washington National Tax office and former KPMG tax partner; 6. John Larson, a former KPMG senior tax manager; 7. Robert Pfaff, a former KPMG tax partner; 8. Mark Watson, a former KPMG tax partner in its Washington National Tax office. In Closing In the end, KMPG led clients down a very dangerous path for the apparent purpose of generating revenue. While even bad publicity is supposed to be good publicity, this situation seems to suggest the opposite. Richard Chapo is with http://www.businesstaxrecovery.com - recovering overpaid taxes for small businesses. Visit our article page - http://www.businesstaxrecovery.com/articles - to read more tax articles.
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