KPMG 'obstructed US tax inquiry'

The US Justice Department has accused accountancy firm KPMG of obstructing an investigation into tax shelters.

According to a court filing, KPMG has withheld documents, delayed the handing over of others and concealed its role in offering advice on avoiding tax.

The IRS has been investigating KPMG since last year, calling on the company to divulge information on tax shelters.

KPMG's actions “demonstrate a concerted pattern of obstruction,” said the US Department of Justice.

Court papers
Monday's filing with a US district court in Washington aims to force the company into handing over more information, much of it protected by attorney-client privilege.

The court papers allege that KPMG's actions “demonstrate a concerted pattern of obstruction and non-compliance, threatening the integrity of the IRS examination process”.

The company denied the charges, saying it has cooperated fully with the investigation.

The industry has been trying to rebuild its reputation since corporate scandals such as Enron highlighted accounting errors.

KPMG's former rival, Andersen, collapsed because of its role in the scandal.

The IRS investigation set out to find whether KPMG should face censure for promoting tax shelters which may have broken the law.

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