BDO Ordered to Give Tax Shelter Records to IRS | AccountingWEB

BDO Ordered to Give Tax Shelter Records to IRS

The Internal Revenue Service has been given clearance by a federal judge to obtain tax shelter records and related client lists from accounting firm BDO Seidman.

Last July, the Justice Department had filed suit against both KPMG and BDO Seidman in an attempt to gain access to documents and client lists relating to tax shelters sold by the firms.

The IRS will presumably use the lists of BDO clients participating in tax shelters as a starting point for choosing audit victims. Clients found guilty of participating in illegal shelters will be subjected to back taxes, along with related interest and penalties. The accounting firm also faces potential penalties if it is determined that the tax shelters sold by the firm are abusive.

IRS Commissioner Charles O. Rossotti has complained about accountants who sell potentially abusive tax shelters to clients. "It is unacceptable for those holding themselves out as tax professionals providing legitimate tax advice to refuse to comply with legal disclosure requirements. It is not a game of hide and seek with the IRS."

The current court action sets the stage for the IRS to obtain similar clearances from KPMG and Andersen, two other firms currently under investigation. The IRS has also sent approximately 70 summonses to the Justice Department for similar records from other accounting firms.

Wait, there's more!
There's always more at AccountingWEB. We're an active community of financial professionals and journalists who strive to bring you valuable content every day. If you'd like, let us know your interests and we'll send you a few articles every week either in taxation, practice excellence, or just our most popular stories from that week. It's free to sign up and to be a part of our community.
Premium content is currently locked

Editor's Choice

WHAT KIND OF FIRM ARE YOU?
As part of our continued effort to provide valuable resources and insight to our subscribers, we're conducting this brief survey to learn more about your personal experiences in the accounting profession. We will be giving away five $50 Amazon gift cards, and a $250 Amazon gift card to one lucky participant.
This is strictly for internal use and data will not be sold
or shared with any third parties.