KPMG tax shelter generated $1bn in benefits

The product, known as a Bond Linked Issue Premium Structure (Blip), was unearthed by US investigators as part of Senate hearings on tax shelters, which gets underway this week.

KPMG's efforts to sell Blips, which have since been outlawed by American authorities, will take centre stage during the hearings.

The firm sold the product through an aggressive telemarketing campaign, reported the Financial Times newspaper.

KPMG said the products were no longer in use and it had reviewed its tax products and discontinued several marketing practices.

The hearings could lead to new legislation in the US, which would increase the fines levied on groups who promote tax shelters.