In the midst of a growing controversy over tax-audit conflicts, PricewaterhouseCoopers (PwC) sold its federal tax lobbying group to Clark/Bardes, a NASDAQ company that plans to list on the New York Stock Exchange next month.

PwC was believed to be the largest tax lobbying firm in the year 2000, when it earned approximately $9.5 million for tax lobbying. The tax lobbying group is led by Ken Kies, former Chief of Staff to the Joint Committee on Taxation of the U.S. Congress.

One of Washington's best known and most outspoken tax lobbyists, Mr. Kies has been known to oppose legislation to curb corporate tax shelters. In a presentation at a Financial Executives International tax seminar last month, Mr. Kies quoted Deputy Assistant Secretary of Tax Policy Pam Olson as saying, "The tax shelter problem at the corporate level has diminished. I'm not saying it’s gone, but it has rapidly declined. There is growing empirical evidence that it has moved beyond the corporate world and has taken hold in the small business area and among individuals."

PwC spokesperson David L. Nestor told the Washington Post the sale of the unit, known as the Federal Policy Group, was not related to Enron or the "scope of services" controversy and the firm would continue to provide tax advice and consulting to its clients.

Nevertheless, the Post sees the sale of the unit and Mr. Kies' departure as removing a "lightning rod," and it points out that the issue of tax consulting by accounting firms continues to be the subject of heated debate among policymakers, accountants and their clients.

Related AccountingWEB links
Enron Reopens Pandora’s Box of Tax-Audit Conflicts
Do Tax Services Impair Auditors’ Independence?

-Rosemary Schlank