TaxCorporate TaxTax shelter charges may be thrown out of court

Tax shelter charges may be thrown out of court

Prosecution in US tax shelter case agrees it could be appropriate for charges to be dropped against former KPMG partners

Prosecutors in the US have admitted that dismissing chargers against former
partners of KPMG – involved in an illegal tax shelter scheme – may be the only
way to deal with violations of their constitutional rights.

In a documents filed to a US court on Friday, prosecutors of the US
Attorney’s office in Manhattan said that dismissal of the charges against at
least four former partners of the accounting firm and two other defendants would
not be appropriate.

This comes after US District Judge, Lewis Kaplan, ruled last year that the
government had unconstitutionally pressured the firm into an arrangement that
saw the defendants’ rights to a fair trial and assistance of counsel violated,

CNNMoney.com
reported.

In response to alelgations that KPMG’s former partners helped cheat
government of $2.5bn in taxes, through the use of tax shelters, the firm came to
a $456m settlement agreement to avoid being indicted, and also withheld payment
of legal fees of the former partners.

The former partners filed documents asking for the charges to be dismissed,
with which prosecutors now agree.

‘Based on the government’s analysis of the court’s prior ruling and on
extensive legal research, we have concluded that the defendants are correct in
their assertion,’ the prosecutors wrote.

Prosecutors, however, asked the court to not dismiss charges against former
KPMG partners , John Larson, Robert Pfaff and Gregg Ritchie, who had at least
significant portions of their legal fees paid by entities other than KPMG.

A fourth partner, David Greenberg, had a termination agreement with the firm,
in which he waived rights for future legal costs from KPMG.

Further reading:

Former KPMG partners want case dismissed

Memo reveals KPMG feared total US collapse

Related Articles

Watch out when winding up

Corporate Tax Watch out when winding up

1m Emma Rawson, ATT Technical Officer
How might Brexit affect UK tax policy?

Brexit & Economy How might Brexit affect UK tax policy?

2m Santhie Goundar
Corporation tax losses – your newly flexible friends

Corporate Tax Corporation tax losses – your newly flexible friends

4m Emma Rawson, ATT Technical Officer
HMRC large business tax enquiry duration rises to 3 years

Corporate Tax HMRC large business tax enquiry duration rises to 3 years

4m Emma Smith, Managing Editor
SMEs paying higher rate of corporation tax than big businesses

Corporate Tax SMEs paying higher rate of corporation tax than big businesses

5m Alia Shoaib, Reporter
Big names, little tax: Airbnb, Facebook, Kellogg’s, eBay

Corporate Tax Big names, little tax: Airbnb, Facebook, Kellogg’s, eBay

8m Alia Shoaib, Reporter
New trading allowance: simplicity, but not as we know it

Administration New trading allowance: simplicity, but not as we know it

8m Emma Rawson, ATT Technical Officer
EU divided over radical tax reforms targeting tech giants

Corporate Tax EU divided over radical tax reforms targeting tech giants

8m Alia Shoaib, Reporter