A federal judge will hear evidence next month to help him decide whether KPMG should be ordered to pick up the legal fees for 16 former employees indicted in connection with the firm's sale of questionably-legal tax shelters.

Judge Lewis Kaplan refused a request by the Big Four firm to toss out the request its by former employees to pay for their defense this. Kaplan has already publicly questioned KPMG's decision to cap the amount of the legal fees it covers for the former partners, saying in June that the firm has regularly paid all costs for its employees in similar situations and urging the workers to file their suit -- further suggesting that the government may have pressured KPMG to stop paying the defendants' legal fees to avoid a potentially fatal indictment of the firm.

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