The KPMG tax shelter row has taken another step towards resolution, with a US
federal judge giving preliminary approval to a $225m (£127m) settlement between
KPMG and law firm Milberg Weiss Bershad & Schulman.
The deal covers about 275 former clients of the Big Four firm who used tax
shelters that the Internal Revenue Service has said were abusive and helped some
600 taxpayers avoid about $2.5bn in taxes.
The settlement will provide $195m compensation to former clients of KPMG and
Sidley, Austin, Brown & Wood who participated in the schemes.
According to reports in the US media, the average payout is expected to be
about $750,000, with taxpayers without statute-of-limitation issues being
awarded about 65% of their fees, while those with issues will receive about 25%
of their fees. The remaining $30m will apparently go to Milberg Weiss.
A grand jury in New York has already indicted 19 former KPMG executives and a
lawyer for Sidley, Austin, Brown & Wood, which worked with KPMG in marketing
the shelters. In September, KPMG agreed to pay $456m in penalties, and former
clients have since brought various lawsuits against the firm.
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