The Justice Department this week widened its probe of tax shelters sold by accounting firms to include second-tier firm Grant Thornton.
The feds announced that they've asked a federal court to enforce summonses issued to Grant Thornton regarding an Internal Revenue Service tax shelter investigation of the accounting firm. The firm said the summonses were a "total surprise," adding that it has already turned over thousands of documents in response to earlier summonses.
The summonses seek information about Grant Thornton's compliance with tax shelter registration and list maintenance requirements. This includes identifying taxpayers who may have invested in tax shelters organized and sold by the firm.
In a statement, Grant Thornton said it has complied with every request made to the firm regarding tax shelters, adding that it has never engaged in the promotion of abusive tax shelters and was "disappointed that the IRS has taken the extraordinary step of proceeding with a summons enforcement action without discussing the matter with us first or otherwise giving us advance notice."
The IRS has gone to court five previous times to get the names of customers, promoters and tax shelter products pushed by accountants, law firms and others. Legal proceedings have involved BDO Seidman, the former Arthur Andersen, KPMG LLP, the Dallas-based law firm of Jenkens and Gilchrist, and a New York company called Diversified Group Inc.
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