The Internal Revenue Service has reached a settlement with the law firm Arnold & Porter, which has paid an undisclosed penalty for promoting tax shelters.
The IRS said the settlement relates to the firm's failure in 2000, 2001 and 2002 to comply with tax-shelter registration requirements and its participation in organizing three types of listed tax-shelter transactions that it sold to high-net-worth individuals and corporations.
The IRS said the firm cooperated with its examination and has put in place a comprehensive compliance program.
Peter Cinquegrani, a former partner at the firm, also pleaded guilty in a federal district court in Manhattan to conspiring to commit tax fraud on behalf of his clients. He admitted that, along with employees of Ernst & Young, he created a tax shelter and a legal opinion to support it, according to Reuters. He also admitted to lying under oath when asked by the IRS about the tax shelter.
Arnold & Porter declined to disclose the amount of the penalty it paid, but issued a statement. "Today a former Arnold & Porter partner pled guilty to charges that arose in connection with a government investigation of certain tax shelter transactions that took place in the time period 2000 to 2002," said the firm. "We have cooperated fully with the government. The firm previously entered a civil settlement with the Internal Revenue Service in connection with these transactions, and has resolved all related private civil claims." The firm said it has also strengthened its internal tax compliance procedures.
