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Law firm to close over tax shelters

March 30, 2007|From the Associated Press

Prominent law firm Jenkens & Gilchrist will shut its doors and pay a $76-million civil penalty in agreements with federal prosecutors and the Internal Revenue Service over allegedly fraudulent tax shelters that the firm promoted, the government said Thursday.

The office of U.S. Atty. Michael Garcia in New York said the Dallas-based firm would not be prosecuted for criminal tax violations because of its cooperation in the investigation since 2004 and its "inability to continue practicing law as a firm."

The Justice Department and the IRS have spent four years examining Jenkens & Gilchrist and its promotion of shelters used to shield billions of dollars from taxes.

Jenkens & Gilchrist, a 56-year-old nationwide law firm, has admitted to developing and marketing fraudulent tax shelters that caused serious losses to the government, Garcia's office said in a statement.

The prosecutors also said the conduct so hurt the firm's reputation and business that it could not survive. The government's action against Jenkens & Gilchrist appeared to mark an expansion of its crackdown on questionable tax shelters.

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