PWC TAPS STAMM TO LEAD U.S. TAX PRACTICE: PricewaterhouseCoopers has named J. Richard (Rick) Stamm to lead the firm’s U.S. tax practice, succeeding Rick Berry, who will retire in June. Stamm will assume the post on July 1. He will work closely with Berry through a transition period between now and the end of June.
Stamm, a 28-year PwC vet, currently oversees the specialized practice units that comprise PwC’s tax practice, and is a member of both the U.S. and the global tax leadership teams.
“Rick Berry has guided our tax practice through some challenging and dramatic periods of change for the accounting industry,” said Stamm. “We have a great foundation from which to build and I look forward to continuing in his path of success.”
KORB SWORN IN AS IRS CHIEF COUNSEL: President Bush’s nominee, Donald Korb, has been sworn in as the 46th chief counsel for the Internal Revenue Service.
IRS Commissioner Mark W. Everson and Treasury Department general counsel Arnold I. Havens administered the oath of office to Korb last week. Under the IRS Restructuring and Reform Act of 1998, the chief counsel reports to both the IRS commissioner and the Treasury general counsel.
Korb, who was confirmed by the Senate on April 8, begins his third tour with the IRS. In 1974, he began work as an attorney/advisor in the chief counsel’s office and spent four years handling a variety of issues. He rejoined the IRS for two years in the mid-1980s as a special assistant to then-Commissioner Roscoe Egger. Korb served as the overall coordinator of the service’s involvement in the legislative process that resulted in the Tax Reform Act of 1986.
Before being nominated by President Bush in December, he served as a partner at the Cleveland-based law firm of Thompson Hine LLP. Prior to that, he was a partner at Coopers & Lybrand, in Cleveland.
In his Senate confirmation hearing, Korb said that his top priority was to assist Everson with the agency’s three key goals: continuing to enhance the service that the IRS provides to taxpayers; continuing to modernize the information technology systems of the IRS; and strengthening the integrity of the nation’s tax system through enhanced enforcement activities.
THE HARTFORD CONFIRMS SUBPOENA FROM FTB: The Hartford insurance company confirmed that it received a subpoena from California’s Franchise Tax Board related to certain transactions proposed by Big Four firm KPMG, which has been under scrutiny for its role in selling abusive tax shelters.
The FTB, the department that administers state personal income and corporation taxes for the state of California, subpoenaed two major insurance companies that it says may have insured certain abusive shelters against government enforcement actions.
While the board didn’t disclose which companies it subpoenaed, The Hartford and American International Group Inc. were named in a November report to the U.S. Senate Government Affairs investigations subcommittee on tax shelters sold by KPMG in the late 1990s and early 2000s.
“The Hartford has received a subpoena from California’s Franchise Tax Board related to certain transactions proposed by KPMG,” said Cynthia Michener, a spokeswoman for the firm. “We intend to respond appropriately.”
Michener noted that, “The Hartford offers tax liability insurance, but does not insure tax shelters.”
“The tax liability insurance offered by The Hartford is business insurance coverage that affords peace of mind if tax money and interest is determined to be owed from a bona-fide business transaction, such as a spin-off or reorganization,” she said. “To our knowledge, we have never insured a tax product promoted by KPMG.”
A spokesman for AIG said, “The company does not comment on the status of regulatory proceedings or litigation.”
The subpoenas demanded the names and addresses of all California residents, persons with mailing addresses in California, and businesses doing business in California who were issued insurance policies or who sought to procure policies for tax liability, fiscal event, tax indemnity or any similar product from 1999 through 2002. They also require the insurance companies to provide documents pertaining to the marketing, sales and issuance of the tax liability insurance policies, “particularly as they may relate to the proliferation of abusive tax shelters.”
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