Ex-KPMG execs seeks dismissal of tax shelter charges

Two former KPMG executives have requested tax shelter charges against them be dismissed or a mistrial declared in a test case which has been closely watched by legal experts because its outcome could affect the US government's continuing investigations into questionable tax shelters.

Giving rise to the request was the US government's change of theory mid-trial for indicting former KPMG tax partner Robert Pfaff and former senior tax manager John Larson, Reuters reports.

According to the defence motion, during the trial, prosecutors elicited testimony from a witness accusing the men of concealing information from KPMG and its tax department to obtain KPMG approval for BLIPS, a type of tax shelter.

'The new government allegations transform a tax fraud conspiracy with KPMG against the IRS into an honest services fraud conspiracy against KPMG,' the defense motion said.