Legal issues

Community News

EEOC Brings Suit that Could Affect Partnership Age Limits

A suit filed last week by federal civil-rights lawyers could change the way aging partners are treated in CPA firms and other private practices that attempt to drive out older partners.The suit was filed Thursday against Chicago-based Sidley Austin Brown & Wood, one of the nation's largest law firms, alleging age discrimination in a case that could sharply curtail the ability of private partnerships to force out older members, the Chicago Tribune reported.The suit by the Equal Employment Opportunity Commission challenges the assumption that partners are not protected by anti-discriminati
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Ahold Problems Surface Again; Nine Charged in Scheme

The Securities and Exchange Commission filed enforcement actions last week against nine individuals alleging they aided and abetted a massive financial fraud by signing and returning materially false audit confirmations sent to them by the auditors of the U.S. Foodservice, Inc. subsidiary of Royal Ahold (Koninklijke Ahold N.V.). The actions filed name as defendants Mark A. Bailin, Kenneth H. Bowman, Timothy Neal Daly, Michael J. Hannigan, Peter O. Marion, John Nettle, Gordon Redgate, Bruce Robinson and Michael Rogers.
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Community News

Judge Rules that PricewaterhouseCoopers Withheld Evidence

A federal magistrate judge in Ohio has concluded that PricewaterhouseCoopers withheld evidence in an accounting fraud trial brought by an audit client.According to The New York Times, United States Magistrate Judge Patricia A. Hemann recommended a default judgment against the accounting firm for failing to turn over evidence sought by Telxon Corporation, which makes bar code readers.
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Tax

Justice Dept. Bars TN Woman From Preparing Tax Returns, Demands Client List

The Justice Department announced this week that a federal court has permanently barred Linda Hendrieth, of Memphis, Tennessee, from preparing income tax returns or claims for refunds. The final judgment, requires Hendrieth to notify her customers of the judgment and to provide to the government the names, addresses, and taxpayer identification numbers of her customers. "People who prepare false or fraudulent tax returns cheat their customers and unfairly shift the tax burden to honest American taxpayers," said Eileen J.
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A&A

Class-Action Suit Against H&R Block to Proceed

The Supreme Court has cleared the way for a class-action suit that accuses H&R Block, the nation's largest tax-preparation company, of charging as many as 17 million customers inflated interest on refund loans, the Houston Chronicle reported, citing news wires.The suit contends that H&R Block charged as much as 100 percent in interest on the refund loans and customers were not told that the company profited from the loans, which were advances on estimated tax refunds, the Chronicle reported.The high court this week let stand a lower court's decision that the case should go forward as a c
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Tax

Enron Directors Agree to Pay Part of $168M Settlement

Ten ex-directors of Enron Corp. have agreed to pay $13 million of their own money as part of a $168 million settlement of a lawsuit filed by shareholders who lost their investments after Enron's 2001 implosion, according to the Wall Street Journal.The agreement, announced Friday, is similar to one reached by former directors of WorldCom Inc.
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Community News

Supreme Court to Hear Appeal of Andersen Conviction

The Andersen accounting firm scored a big victory in its ongoing efforts to overturn a criminal conviction stemming from its involvement in the Enron debacle, with the Supreme Court agreeing to hear an appeal in April.
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Tax

LA Sues Travel Websites for Underpaying Hotel Taxes

Los Angeles leaders have accused Internet travel companies of costing the city millions of dollars a year by underpaying hotel taxes. AdvertisementAccountingWEB is pleased to bring you tools that can help systematize the accounting department of a small company, corporate business or a public accounting firm.
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Tax

SEC Charges TV Azteca and Its Chairman Ricardo Salinas Pliego with Fraud

The Securities and Exchange Commission this week filed civil fraud charges against TV Azteca S.A. de C.V. (TV Azteca or the company), a Mexican issuer whose American depository receipts trade on the NYSE, its parent company, Azteca Holdings, S.A., de C.V. (Azteca Holdings), and three current and former TV Azteca officers and directors, Ricardo Salinas Pliego, Pedro Padilla Longoria, and Luis Echarte Fernandez.
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Tax

Ex-WorldCom Directors Agree to Pay from Own Pockets

In an unprecedented legal move that could send shock waves through board rooms around the country, 10 ex-directors of the former WorldCom Inc.
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Tax

Six Convicted in Far Reaching International Tax Fraud Case

Eileen J. O’Connor, Assistant Attorney General, United States Justice Department, Tax Division, John McKay, United States Attorney for the Western District of Washington, and Mark W. Everson, Internal Revenue Service Commissioner, announced last week that after seven weeks of trial, six persons associated with Anderson’s Ark and Associates (AAA), were convicted in connection with one of the most far ranging fraudulent tax schemes ever prosecuted. The jury was unable to reach a verdict on four other defendants.
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Tax

Law Firm to Pay $81.55 Million to Settle Tax Shelter Claims

The national law firm of Jenkens & Gilchrist, PC, has agreed to pay $81.55 million in a class action settlement to resolve claims against the firm related to its tax shelter work. This week's settlement concludes negotiations that took over 14 months to complete and represents two significant modifications to the initial settlement, reached in April 2004.
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Community News

Deloitte Claims Grant Thornton Held Back Parmalat Information

Big Four accounting firm Deloitte has accused a smaller rival, Grant Thornton, of hindering its audit of Parmalat, the once-mighty Italian dairy giant that collapsed amid accusations of widespread fraud.
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Community News

Charges Against Deloitte & Touche Dismissed in Ahold Matter

Deloitte & Touche is off the hook in a class action suit brought by investors of Dutch retailer Ahold NV, thanks to a federal judge's move to dismiss claims that Deloitte engaged in deceptive conduct and recklessly disregarded misstatements in Ahold's financial documents, the Baltimore Business Journal reported.
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Tax

Defendants Hindered Tax Collection With 'Empty Shell' Corporations

The Justice Department announced this week that a federal court in Oklahoma has permanently barred four Oklahoma City residents -- Joseph Wolf, Cecil Fisher, Louise Qualls, and Eric Wolf -- from operating or working for so-called “professional employer organizations” or “employee leasing” companies. Judge Joe Heaton of the U.S.
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Community News

New Fannie Mae Executive Vows to 'Put Things Right'

Investors are hoping that management changes at Fannie Mae will bolster the company's reputation with regulators and Congress.Fannie Mae's board last Tuesday replaced the two top executives and fired its auditor, KPMG, as pressure mounted to make big changes in light of the company's accounting standards violations and the Securities and Exchange Commission's order for a restatement of possibly $9 billion.Chief Executive Officer Franklin D. Raines and Chief Financial Officer Timothy Howard were temporarily replaced by, respectively, Daniel H.
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Community News

E&Y to Pay $125M to Settle Claims Over Failed Illinois Bank

Ernst & Young LLP will pay $125 million to settle claims stemming from its involvement in the failure of an Illinois savings bank, according to a consent order with the Office of Thrift Supervision.
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California Sues Edward D. Jones Over Mutual Fund Deals

California Attorney General Bill Lockyer has filed suit on behalf of the state against brokerage firm Edward D.
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Tax

Professional Fees in Enron Bankruptcy Top $780M

Advisers that led Enron through its complex bankruptcy case have asked a judge to approve more than $780 million in fees. That figure includes $164 million requested by New York law firm Weil Gotshal & Manges. If the request is approved, it will be more than any law firm has been awarded in a bankruptcy case, according to data compiled by Bloomberg. The largest bankruptcy in the U.S.
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Tax

IRS Accepts Settlement Offer on Contingent Liability Tax Shelter

The Internal Revenue Service announced last week that it has successfully resolved a pending dispute with Hercules Incorporated, over a listed tax shelter transaction. This transaction, known as a contingent liability transaction, is at issue in a case pending in the United States Tax Court.In Notice 2001-17, the Service listed the contingent liability transaction, and set forth the IRS’s position that the strategy failed to comply with statutory requirements and lacked economic substance or effect. The contingent liability transaction was designed to shelter capital gains.
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Voice of the Editor

Results from a recent AICPA survey disclosed the two top priorities for CPA firms as they plan for the future: bringing in new business and finding talent. Our goal at Sift Media is to help our readers deal with the issues most important to them. One way in which we are doing this is through the launch of our new recruitment/placement service, Going Concern Jobs. Check it out today for your talent needs.
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Gail Perry, CPA
Publisher/Editor-in-Chief, AccountingWEB
editor@accountingweb.com
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