Big Four firm PricewaterhouseCoopers is being audited by the Internal Revenue Service for possible tax reporting violations, according to a published report.
Specifically, the timing of tax deductions, the management of the Big Four firm's pension plan, and how the firm moved profits between international units (transfer pricing), are reportedly being investigated. The review itself could be completed as soon as this month and the IRS is expected to reach its conclusions by the end of this year.
Officials at PwC and the IRS have declined to comment.
According to a June 15 letter sent from tax partner Samuel Starr to the firm's 2,000 U.S. partners, the IRS investigation began in January 2005 and the agency alerted PwC in a June 2005 letter to Starr, a Washington-based partner who teaches law at Georgetown University.
The accounting firm set up a cash-balance pension plan for its American employees in 1998 and designed similar programs for clients including Bank of America Corp.
The letter said the audit covers the firm's fiscal years ending September 2002 and September 2003.
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