PracticeAccounting FirmsE&Y faces criminal probe of tax shelters

E&Y faces criminal probe of tax shelters

As part of the global crackdown on tax avoidance, authorities in New York have launched a criminal inquiry into the tax shelters promoted by Ernst & Young to its clients.

Link: E&Y avoidance scheme draws in Revenue

A similar probe was launched into fellow Big Four firm KPMG in February and follows falling corporate tax receipts, which contributed just 7.4% to the total US tax bill, the Wall Street Journal reported.

Almost two-thirds of companies in the US paid no tax in 2000.

Crackdown on avoidance sparks fear of exodus

E&Y reached a settlement last July over similar allegations, paying $15m (£8.4m) to resolve charges that it failed to comply with rules governing tax shelters, including keeping lists of companies who use them.

It did not admit to any wrongdoing.

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