PracticeAccounting FirmsE&Y may settle tax row out of court

E&Y may settle tax row out of court

Big Four firm's US arm may weather cash punishment to avoid criminal proceedings in damaging tax shelter case

Ernst
& Young
may be considering taking a cash hit instead of enduring a
lengthy court battle in the defence of fraud claims. 

US prosecutors charged two current and two former partners of the accounting
firm on Wednesday with tax fraud conspiracy relating to the sale of tax
shelters.

The indictment came after years of investigations into the sale of aggressive
tax shelter strategies. Sixteen former partners at
KPMG are also facing trial
in September.

E&Y is discussing settlement options that would probably fall short of an
indictment, but include monetary sanctions,
The Wall Street Journal
reported.

In a statement on Wednesday, E&Y said it had made changes to its tax
practice:
‘The individuals who were indicted are two former partners and two partners who
have been on administrative leave,’ E&Y spokesman Charles Perkins said.
‘They were part of a small group within the firm, disbanded years ago. E&Y
has co-operated with the government from the beginning of its investigation, and
we will continue to do so.’

Further reading:

E&Y partners charged with tax fraud conspiracy

Plea agreement likely in KPMG tax shelter case

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