TaxProf Blog

Editor: Paul L. Caron
Pepperdine University School of Law

A Member of the Law Professor Blogs Network

Wednesday, December 24, 2008

NLJ: What We Can Learn the KPMG Tax Shelter Trial

Today's National Law Journal: A White-Collar Defender's Take on What Can be Learned from the KPMG Verdicts, by Pamela A. MacLean:

Douglas Whitney, a partner at McDermott Will & Emery, has represented national accounting companies and law firms accused of promotion of illegal tax shelters in Internal Revenue Service investigations and enforcement actions for six years. He litigates white-collar criminal defense cases from the firm's Chicago office. ...

NLJ: What has been learned from the KPMG prosecutions?

DW: It certainly has been an unusually long and tortured path from investigation to verdict. [The] verdict is a mixed one. All the defendants were acquitted on conspiracy, and Greenberg on tax evasion as well. The acquittals convey the idea that a criminal courtroom is not the appropriate place to define elusive contours of the economic substance doctrine. The economic substance doctrine is the long-recognized judicial doctrine that transactions be supported by economic substance and can't be motivated solely to generate a tax benefit. It has gotten a fair amount of attention in civil tax cases, about where to draw the line. I think the verdict suggests that reasonable minds can differ about where to draw the line, but that criminal court is no place to decide it.

http://taxprof.typepad.com/taxprof_blog/2008/12/nlj-what-we-can-learn-.html

News | Permalink

TrackBack URL for this entry:

http://www.typepad.com/services/trackback/6a00d8341c4eab53ef01053699114e970c

Listed below are links to weblogs that reference NLJ: What We Can Learn the KPMG Tax Shelter Trial:

Comments

These cases were about fact fraud, not economic substance. The defendants elicited factual representations they knew or should have known were not true.

Posted by: Anon | Jan 2, 2009 5:26:18 PM