The firm insists the techniques are ‘legal and proper’ but some US experts have alleged one of them is illegal because it could hide transactions from the Internal Revenue Service, amounting to tax evasion, according to the New York Times.
Experts claim the four techniques cut the tax bill from 38.6% to just 18% for which the firm is paid a hefty sum for its advice – 6% to 8% of the tax bill plus $50,000 for a lawyer’s letter of opinion.
All the firms’ techniques have been made public – a financial advisor who was briefed by E&Y made them known to the New York Times.
In defending the techniques, Ernst & Young said at least one of them has been disclosed to the IRS and the government office has not challenged it.
Does Darwin's theory apply to taxation? Colin ponders...
The UK tax gap fell in 2014-15 to its lowest-ever level of 6.5%, revealed official statistics published today
Changes to the tax system is urged to support the growth of entrepreneurs, found a report from the Grant Thornton UK, the Institute of Directors, and the Prelude Group
The EC has been instructed to draft a European Union (EU) directive authorising an EU financial transaction tax, which would apply to ten of the EU’s 28 member states