KPMG Makes Management Changes After Recent Tax Shelter Probe
On Monday, KPMG's Chairman and Chief Executive Eugene D. O'Kelly announced that several management changes were being made in the firm's leadership structure.
This announcement comes at a time when the IRS is investigating KPMG as a promoter of potentially abusive tax shelters that cost the U.S. Treasury $1.4 billion. According to a GAO report, tax shelter activities cost the IRS between $11 billion and $15 billion each year between 1993 and 1999.
Among the management changes are:
- Jeff Stein, Deputy Chairman of KPMG LLP, formerly Vice Chair - Tax Services, will retire from the firm effective January 31, 2004. A successor will be elected by the Board and ratified by a vote of the partnership in February.
- Jeff Eischeid has been placed on administrative leave and will no longer serve as partner-in-charge of the Tax Practice's Personal Financial Planning practice. According to Rueters, a KPMG spokesman declined to give further details on Eischeid's departure.
- Richard Smith, who has served as Vice Chair - Tax Services for the past two years, will take on different practice responsibilities. His successor will be named shortly.
A KPMG Statement is below.
KPMG is committed to fill our role as a responsible corporate steward. These changes are consistent with our on-going consideration of the firm's tax practices and procedures, and reaffirm KPMG's commitment to the highest standards of professional practice and responsibility. We look forward to a lasting impact for these decisions, and for our firm to operate in a fully positive, productive, client-oriented environment.