PwC To Settle With IRS Over Tax Shelter Advice

by Mike Godfrey, Tax-News.com, Washington

01 July 2002

The US Internal Revenue Service announced last week that international accounting firm, PricewaterhouseCoopers had agreed to settle over advice on tax shelters given to clients over the last seven years.

'Without admitting or denying wrongdoing or legal liability...PricewaterhouseCooper LLC agreed to make a substantial payment to resolve issues in connection with advice rendered to clients dating back to 1995,' a statement released by the tax authority on Thursday announced.

Reuters reported last week that the accounting firm also agreed to provide the IRS with 'certain client information' relating to tax shelter investigations, and to work with the tax authority on ways to ensure compliance with tax shelter registration rules.

This follows a recent New York Times report in which fellow 'Big Five' accounting firm, Ernst & Young was accused by David Cay Johnston of encouraging wealthy Americans to evade taxes.

The report called the tax minimization techniques revealed 'morally indefensible', and questioned their legality.

However, the accounting firm hit back angrily at the NY Times' claims, arguing in a statement that: 'Under no circumstance would Ernst & Young authorize advising a client to conceal income or evade taxes. We strongly resent the implication that we would do so.'

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