Victory for KPMG in California ruling

KPMG has notched up a legal victory in the tax shelter case involving 18
former partners of the firm

A federal appeals court ruled that US courts (rather than state courts) have
jurisdiction over a dispute involving a failed KPMG LLP tax shelter that left a
California businessman with a $52m (£27m) tax bill.

KPMG had argued for a federal judge to appoint an arbitrator rather than have
the case handled in California state court.

The case involves a tax shelter used by J. Paul Reddam, on the advice of KPMG
and its law firm, now known as Sidley Austin LLP.

Reddam used the tax shelter to minimize his tax liabilities in the sale of a
business he founded to General Motors in 1999.

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