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KPMG seeking plea deal over tax shelters

June 16, 2005 at 9:12 AM   |   Comments

WASHINGTON, June 16 (UPI) -- Accounting firm KPMG LLP is negotiating with U.S. Justice Department authorities to avert an indictment over its use of now-discredited tax shelters.

The case against KPMG and some former officers concerns shelters pitched to rich people that, the Internal Revenue Service says, cost the government as much as $1.4 billion.

The threat of an indictment could persuade KPMG to accept big fines under a deferred-prosecution agreement, the Wall Street Journal said.

For the government's part, such a plea bargain could keep KPMG, one of only four big accounting firms left, from collapsing. Prosecutors haven't forgotten that their high-profile indictment of Arthur Andersen led to the firm's collapse.

A subsequent conviction of Andersen was later overturned by the U.S. Supreme Court -- but not before thousands of workers lost their incomes.

© 2005 United Press International, Inc. All Rights Reserved. Any reproduction, republication, redistribution and/or modification of any UPI content is expressly prohibited without UPI's prior written consent.
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