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KPMG Must Turn Over Tax-Shelter Documents

January 01, 2003|From Reuters

WASHINGTON — A federal judge has ordered accounting firm KPMG to hand over tax-shelter-related documents the firm tried to withhold from the Internal Revenue Service to a retired judge for evaluation.

The Justice Department filed lawsuits against accounting firms KPMG and BDO Seidman in July in an effort to force them to disclose information about tax shelters they promoted to the IRS, which is cracking down on the abuse of tax minimization strategies.

KPMG has cited client-attorney privilege in its refusal to disclose the documents.

But the U.S. District Court for the District of Columbia, where the lawsuit against KPMG was filed, said only four of the 30 documents the firm is withholding could be supported by such claims of privilege.

As a result, in an order filed Dec. 20, the court ordered KPMG to hand over the documents to retired Magistrate Judge Patrick Attridge, who will examine the documents and privilege claims and submit his recommendations.

"Based upon the court's ruling, there is not yet a final determination in this matter. The privilege claims have been referred to a magistrate judge for review," KPMG said in a statement.

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