New York (Jan. 30, 2004) -- KPMG has named two new leaders to head up its tax practice, following a shakeup earlier this month of that group’s leadership in connection with the firm’s ongoing tax shelter woes.
The Big Four firm announced Thursday that James Brasher, 50, has been named vice chair of tax services and John Chopack, 56, has been named vice chair of tax services operations, effective Feb. 1. Brasher succeeds Richard Smith, who the firm said is taking on new responsibilities with its global tax operation. Chopack replaces William Hibbitt, who will return to a client service role.
Smith and Hibbitt were among the executives displaced in the shakeup announced Jan. 12, when KPMG, one of several firms under fire by regulators for its role in promoting abusive tax shelters, announced that deputy chairman and former vice chair of tax services Jeff Stein would retire at the end of this month. In addition, Jeff Eischeid, partner-in-charge of the tax practice's personal financial planning practice, gave up that post and was put on administrative leave.
Brasher, who joined the firm in 1975 and became a partner 10 years later, currently serves as the firm's Midwest area managing partner for the federal tax practice in Chicago. He has served as a member of KPMG's board of directors since 1999 and chaired its nominating committee last year.
Chopack, who became a partner in 1981, heads up the firm's tax risk and regulatory matters group in Philadelphia. Prior to that, he served as the mid- Atlantic area managing partner from 1998 to 2003.
"KPMG is dedicated to leading the effort to return credibility to our profession and restore investor confidence in the capital markets," said chairman and chief executive Eugene D. O'Kelly.
Over the past two years, an Internal Revenue Service crackdown on tax shelter promoters has resulted in legal action against several firms, including Grant Thornton, KPMG, BDO Seidman and Ernst & Young. The Public Company Accounting Oversight Board has also pledged to use its audit firm inspection authority to crack down on abusive tax shelter promotions by accountants.
According to a report compiled by a Senate government affairs subcommittee, KPMG collected roughly $124 million in fees from shelters from 1997 through 2001 -- shelters that the report estimated cost the federal government about $1.4 billion in lost revenue.
-- WebCPA staff
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