New York (Feb. 20, 2004) -- KPMG LLP revealed that the U.S. Department of Justice has commenced an investigation into certain tax strategies formerly offered by the firm.
In a statement issued late Thursday, KPMG said that it was informed that an investigation by the U.S. Attorney's Office in the Southern District of New York is underway.
"It is our understanding that the investigation is related to tax strategies that are no longer offered by the firm," KPMG said. "As previously announced, KPMG has taken strong actions as part of our ongoing consideration of the firm's tax practices and procedures, including leadership changes announced last month and numerous changes in our risk management and review processes. We have assured the U.S. Attorney's office that we intend to cooperate fully in this matter."
Last month, the firm named two new leaders to head up its tax practice, following a shakeup in January of that group’s leadership in connection with the firm’s ongoing tax shelter woes. The firm named James Brasher as vice chair of tax services and John Chopack as vice chair of tax services operations. Brasher succeeded Richard Smith, who took on new responsibilities with the firm's global tax operation. Chopack replaced William Hibbitt, who returned to a client service role.
As a result of that shake-up, deputy chairman and former vice chair of tax services Jeff Stein retired and Jeff Eischeid, partner-in-charge of the tax practice's personal financial planning practice, gave up that post and was put on administrative leave.
-- WebCPA staff
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