NEW YORK, June 16 (UPI) -- A tax shelter of New York-based accounting firm KPMG LLP saved more than two dozen major corporations at least $1.7 billion, the Wall Street Journal reports.
The U.S. Internal Revenue Service declared the tax shelter, known as "contested liability acceleration strategy," or CLAS, abusive in November 2003.
Companies that used the shelter include Atlanta-based Delta Airlines, the Michigan-based Whirlpool Corp, Clear Channel Communications Inc. of Texas, Virginia-headquartered WorldCom Inc., and California's Tenet Healthcare Corp., the companies and KPMG records said.
The purpose of CLAS was to help companies speed up the timing of tax deductions for settlements of lawsuits or other claims. Normally, deductions are not allowed until claimants are paid. Some former KPMG tax partners estimated CLAS generated $20 million for the firm.
A 1999 internal KPMG document said ideal clients for the shelter had at least $150 million of pending claims for things such as shareholder lawsuits, personal-injury claims or environmental actions.
