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.
MTD represents 'the single most significant change to the UK’s system of taxation in recent times', says Knill James partner Nick Rawson. So, how prepared are SMEs for digital tax reporting?
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Unincorporated businesses under the VAT threshold given an extra year to prepare before MTD becomes mandatory