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.