Case Study : Kpmg Tax Shelter Business

In this case, there are several conspirators who is involved in the fraud receiving punishment from either SEC or federal government. Robert Levin, the AMRE executive and major stockholder, and Dennie D.Brown, the company’s chief accounting officer, were subject to the punishment in the form of a huge amount of fine by the SEC and the federal government. This punishment came from reasons. After AMRE going public, the company have the obligation to publish its financial reports but its performance did not meet expectation. The investigation by SEC shows that Robert took the first step of this scam, fearing the sharp drop of AMRE’s stock price because of the poor performance of company. He abetted Brown, to practice three main schemes to present a false appearance of profitable and pleasant financial reports. Firstly, they instructed Walter W.Richardson, the company’s vice president of data processing, to enter fictitious unset leads in the lead bank and they originally deferred the advertising cost mutiplying “cost per lead” and “unset leads” amount, so that they deferred a portion of its advertising costs in an asset account. The capitalizing of advertising expenses allowed them to inflate the net income for the first quarter of fiscal 1988. Secondly, at the end of the third and fourth quarters of fiscal 1988, they added fictitious inventory to AMRE’s ending inventory records, and prepared bogus inventory count sheets for the auditors. Thirdly, they overstated the percentage

The word “fraud” was magnified in the business world around the end of 2001 and the beginning of 2002. No one had seen anything like it. Enron, one of the country’s largest energy companies, went bankrupt and took down with it Arthur Andersen, one of the five largest audit and accounting firms in the world. Enron was followed by other accounting scandals such as WorldCom, Tyco, Freddie Mac, and HealthSouth, yet Enron will always be remembered as one of the worst corporate accounting scandals of all time. Enron’s collapse was brought upon by the greed of its corporate hierarchy and how it preyed upon its faithful stockholders and employees who invested so much of their time and money into the company. Enron seemed to portray that the goal of corporate America was to drive up stock prices and get to the peak of the financial mountain by any means necessary. The “Conspiracy of Fools” is a tale of power, crony capitalism, and company greed that lead Enron down the dark road of corporate America.

Between the years 2000 and 2002 there were over a dozen corporate scandals involving unethical corporate governance practices. The allegations ranged from faulty revenue reporting and falsifying financial records, to the shredding and destruction of financial documents (Patsuris, 2002). Most notably, are the cases involving Enron and Arthur Andersen. The allegations of the Enron scandal went public in October 2001. They included, hiding debt and boosting profits to the tune of more than one billion dollars. They were also accused of bribing foreign governments to win contacts and manipulating both the California and Texas power markets (Patsuris, 2002). Following these allegations, Arthur Andersen was investigated for, allegedly,

As the overall businesses of the business cannot be reserved nor will be the specific tasks of the employees easy to regulate, there's a good amount of reasoning behind the thought of hiring another person to complete the job.

A client wants to know the difference between the tax treatment of a professional gambler and a normal taxpayer with gambling winning and losses.

No. The Tax Court noted that according to Sec. 6501, taxes are to be assessed within three years after a return is filed. Since the deficiency notices were delivered via certified mail on February 7, 2012, they were issued before the expiration of the three-year period and thus were

In 2008 this country faced one of the worst fraud scams in the history of the United States. Bernie Madoff one of the most reputable hedge fund managers at the time perpetrated a ponzi scheme of epic proportions. Bernie Madoff was able to fraud investors of over 25 billion dollars, creating a non-transparent business envoirment. This atrocity effected different types of investors, expanding across all different industries, and with his transgressions he earned 150 years in jail. Since then regulation in the accounting and Finance field has increased dramatically, and has made it a lot harder for companies to get away with “cooking the books”.

In the summer of 2001, questions began to arise about the integrity of Houston energy company Enron’s financial statements. In December, they filed for bankruptcy as their fraud came to light and the United States government froze all of their assets and began prosecuting their executives and their external auditing firm Arthur Anderson (Franzel 2014). Enron was not the only company using accounting loopholes to mislead stockholders though; Global Crossing, Tyco, Aldephia, WorldCom, and Waste Management all underwent investigation for similar

The founder of his own law firm in Miami, Florida, David M. Garvin devotes most of his practice to business tax law and defending clients accused of white collar crimes. He has successfully defended numerous clients in cases related to federal criminal tax law and securities litigation and represented clients in appellate courts. Examples of cases handled by Mr. Garvin include money laundering, insider trading, tax fraud, wire fraud and violations of the Foreign Account Tax Compliance Act.

Case 10-10 An Offer You Can’t Refuse Fast Eddie, a publicly held company, manufactures and installs refrigeration systems for governmental and commercial applications. Fast Eddie is being investigated by a governmental agency for overpricing on government sales during the period from 2007 through 2009 as well as allegations of misrepresentations by one of Fast Eddie’s former officers, Sweet Lou. The criminal and civil investigations began in late 2009. In the prior fiscal year, the company’s auditors, CPAs-R-Us, obtained management’s representation and a letter from Fast Eddie’s independent legal counsel that indicated that the ultimate outcome of the investigation could not be determined and that any potential payment for the alleged

Taxes 'N Books, Inc. is an accounting firm that is located in Charlotte, North Carolina. They focus on providing a world class online experience for all of their clients. Taxes 'N Books, Inc. specializes in taxes, accounting, bookkeeping, and payroll. With advanced software customized to fit their clients’ business needs, they are able to keep their clients’ books as accurate as possible. Their clients are their number one priority.

The United States of America, a country driven by business, money, and technological advancement, has the third highest corporate income tax rate in the world; the highest among the thirty-four industrialized nations of the Organization for Economic Co-operation and Development (OECD) (Pomerleau, 1). Large corporations that have developed in the United States have recognized this. In 1982, McDermott Inc., with the help of its lawyers, developed a strategy in which they could continue with their business, founded in New Orleans, without having to be punished by the prohibitive tax rates employed by the U.S. government (Mider, 2). Thus, the corporate tax inversion was conceived; an idea that allowed businessmen and women that have used

Professionally, I've experienced fraudulent financial information in several scenario as a tax preparer that help small business owners report its annual taxes which usually require the organization to fulfill a consideration to the Internal Revenue Service. Many of my clients have no problem fulfilling such obligations as its expected, and many companies can forecast its tax cost. Basically, most business owners take accountability and just looking to get any information on potential tax breaks. On the other hand, I've encountered a few situations where the financial statements seemed either understated, overstated, or have some other form of deception. When I notice this I recommend to the business owner to hire an ongoing accountant, and that I can't file a tax return because the information is insufficient.

The media attention this scandal has received has sparked an ongoing debate on the role of the IRS moving forward. As new information is surfacing, the conversation is continuously changing. In October of 2015, after over two years of investigation Lerner and the IRS were not found to be guilty. Assistant Attorney General Peter Kadzik noted, “Our investigation uncovered substantial evidence of mismanagement, poor judgment and institutional inertia, leading to the belief by many tax-exempt applicants that the IRS targeted them based on their political viewpoints. But poor management is not a crime.”

Enron and Arthur Anderson were both giants in their own industry. Enron, a Texas based company in the energy trading business, was expanding rapidly in both domestic and global markets. Arthur Anderson, LLC. (Anderson), based out of Chicago, was well established as one of the big five accounting firms. But the means by which they achieved this status became questionable and eventually contributed to their demise. Enron used what if often referred to as “creative” accounting methods, this resulted in them posting record breaking earnings. Anderson, who earned substantial audit and consultation fees from Enron, failed to comply with the auditing standards required in their line of work. Investigations and reports have resulted in finger