Law.com Subscribers SAVE 30%
Call 855-808-4530 or email [email protected] to receive your discount on a new subscription.
The KPMG Tax Shelter Prosecutions
On Aug. 29, 2005, the Department of Justice, the IRS and KPMG LLP (KPMG) announced that an agreement had been reached with the U.S. Attorney's Office for the Southern District of New York resolving the Grand Jury investigation into tax shelters designed, developed and sold by KPMG from 1996 to 2002 and related conduct. The settlement also resolved the IRS's examination of these activities. KPMG and the government entered into a deferred prosecution agreement (DPA), pursuant to which KPMG acknowledged responsibility for engaging in a massive tax fraud conspiracy that generated at least $11 billion in fraudulent tax losses, which cost the government at least $2.5 billion in evaded taxes.
The DPA requires KPMG to pay a criminal fine of $128 million, restitution to the IRS of $228 million, and an IRS penalty of $100 million — a total of $456 million, to be paid by Dec. 21, 2006. These payments will not be tax deductible nor covered by insurance. The criminal charge will be dismissed on Dec. 31, 2006, if KPMG complies with the stringent terms and conditions of the DPA. These include:
- Restrictions and elevated standards for tax practice;
- Full cooperation with the government's ongoing investigation;
- The tolling of the statute of limitations;
- Maintaining a compliance and ethics program that meets the criteria of the Sentencing Guidelines;
- An independent monitor to check compliance with the DPA; and
- An IRS closing agreement that provides for enhanced oversight of KPMG's tax practice.
KPMG's global settlement enables it to avoid a criminal conviction that would probably have put it out of business like its former competitor Arthur Andersen LLP.
This premium content is locked for Entertainment Law & Finance subscribers only
ENJOY UNLIMITED ACCESS TO THE SINGLE SOURCE OF OBJECTIVE LEGAL ANALYSIS, PRACTICAL INSIGHTS, AND NEWS IN ENTERTAINMENT LAW.
- Stay current on the latest information, rulings, regulations, and trends
- Includes practical, must-have information on copyrights, royalties, AI, and more
- Tap into expert guidance from top entertainment lawyers and experts
Already a have an account? Sign In Now Log In Now
For enterprise-wide or corporate acess, please contact Customer Service at [email protected] or 877-256-2473
Why So Many Great Lawyers Stink at Business Development and What Law Firms Are Doing About It
Why is it that those who are best skilled at advocating for others are ill-equipped at advocating for their own skills and what to do about it?
Bankruptcy Sales: Finding a Diamond In the Rough
There is no efficient market for the sale of bankruptcy assets. Inefficient markets yield a transactional drag, potentially dampening the ability of debtors and trustees to maximize value for creditors. This article identifies ways in which investors may more easily discover bankruptcy asset sales.
The DOJ's Corporate Enforcement Policy: One Year Later
The DOJ's Criminal Division issued three declinations since the issuance of the revised CEP a year ago. Review of these cases gives insight into DOJ's implementation of the new policy in practice.
A Lawyer's System for Active Reading
Active reading comprises many daily tasks lawyers engage in, including highlighting, annotating, note taking, comparing and searching texts. It demands more than flipping or turning pages.
Protecting Innovation in the Cyber World from Patent Trolls
With trillions of dollars to keep watch over, the last thing we need is the distraction of costly litigation brought on by patent assertion entities (PAEs or "patent trolls"), companies that don't make any products but instead seek royalties by asserting their patents against those who do make products.