Monday, December 1, 2014
Following up on my previous posts (links below) on the whistleblower suit brought by a former Vanguard tax lawyer alleging that the mutual fund giant evaded over $1 billion in taxes: Philadelphia Inquirer, Vanguard 'Silenced' Tax Fraud Claims, Whistleblower Says:
David Danon tried to warn Vanguard Group it was illegally underpaying its income taxes while he was a tax lawyer for the company from 2008 to 2013 -- and was punished, with "attempts to silence me," until he was fired "in retaliation for my persistent and vocal questioning" of the $3 billion investment company's "unlawful practices," the Wayne resident says in an affidavit filed for his whistleblower lawsuit this week.
He says he only sued after Vanguard officials' "refusal to act on clear violations of law" he brought to their attention, showed the company "intentionally engaged in unlawful conduct," Danon alleged in court papers meant to answer Vanguard's efforts to discredit him and stop his complaint from advancing in a New York court.
Danon alleges Vanguard, based in Malvern, has violated federal tax law governing payments between corporate affiliates, by undercharging for services it provides to its own mutual funds. Low income means less income tax. Danon says Vanguard has used this method to underpay taxes by more than $1 billion over the years.
Prior TaxProf Blog coverage: