James F. McDonough
Of Counsel
732-568-8360 jmcdonough@sh-law.comFirm Insights
Court Reverses Ernst & Young Tax Decision
Author: James F. McDonough
Date: January 21, 2013
Key Contacts
Back
Reversal of Tax Decision
Two former Ernst & Young attorneys won a reversal of a tax decision that convicted them of developing illegal tax shelters from 1999 to 2001.
By a 2-1 vote, a panel of the 2nd U.S. Circuit Court of Appeals in New York overturned a decision that convicted Martin Nissenbaum and Richard Shapiro of creating unlawful shelters at the accounting firm to help wealthy individuals evade federal taxes, citing a lack of evidence. However, the court reaffirmed the conviction of Robert Coplan and Brian Vaughn, who were sentenced to 36 and 20 months in prison, respectively. The panel also affirmed the conviction of investment advisor Charles Bolton, but ordered a reduction of his fine.
The defendants were accused of costing the government roughly $2 billion in taxes by helping those individuals with more than $10 million in taxable income create paper losses using fraudulent scenarios, Reuters reports. This enables the losses to be taxed at a capital gains rate, rather than ordinary income rate, the news source added.
The investigation was started shortly after the accounting firm, Ernst & Young, started a new team to develop tax shelters that would target high net-worth individuals, according to The Associated Press.
They were convicted in 2010 for tax law violations, and Nissenbaum and Shapiro were also charged with obstructing the Internal Revenue Service. Ernst & Young was not charged in the case, as lawmakers say they cooperated with authorities.
While tax shelters are legal, the IRS has been focusing heavily on these tax-advantaged strategies as of late in an attempt to detect potential tax evasion and close the growing tax gap. As a result, the federal agency has partnered with many countries and banks to provide more transparency in the account and reporting processes of investors.
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Related Posts
See all
Corporate Transactions: Best Practices for Successful Deals
Corporate transactions can have significant implications for a corporation and its stakeholders. For deals to be successful, companies must act strategically to maximize value and minimize risk. It is also important to fully understand the legal and financial ramifications of corporate transactions, both in the near and long term. Understanding Corporate Transactions The term “corporate […]
Author: Dan Brecher
How to Conduct a Fair and Legal Employee Termination in 2025
Ongoing economic uncertainty is forcing many companies to make tough decisions, which includes lowering staff levels. The legal landscape on both the state and federal level also continues to evolve, especially with significant changes to the priorities of the Equal Employment Opportunity Commission (“EEOC”) under the Trump Administration. Terminating an employee is one of the […]
Author: Angela A. Turiano
Admin Dissolution for Annual Report: What You Need to Know
While filing annual reports may seem like a nuisance, failing to do so can have significant ramifications. These include fines, reputational harm, and interruption of your business operations. In basic terms, “admin dissolution for annual report” means that a company is dissolved by the government. This happens because it failed to submit its annual report […]
Author: Dan Brecher
What Is Antitrust Litigation Law?
Antitrust laws are designed to ensure that businesses compete fairly. There are three federal antitrust laws that businesses must navigate. These include the Sherman Act, the Federal Trade Commission Act, and the Clayton Act. States also have their own antitrust regimes. These may vary from federal regulations. Understanding antitrust litigation helps businesses navigate these complex […]
Author: Robert E. Levy
Dissolving Your Business: Essential Legal Steps to Protect Your Interests
If you’re considering closing your business, it’s crucial to understand that simply shutting your doors does not end your legal obligations. Unless you formally dissolve your business, it continues to exist in the eyes of the law—leaving you exposed to ongoing liabilities such as taxes, compliance violations, and potential lawsuits. Dissolving a business can seem […]
Author: Christopher D. Warren
The Role of Corporate Restructuring in Mergers & Acquisitions
Contrary to what many people think, corporate restructuring isn’t all doom and gloom. Revamping a company’s organizational structure, corporate hierarchy, or operations procedures can help keep your business competitive. This is particularly true during challenging times. Corporate restructuring plays a critical role in modern business strategy. It helps companies adapt quickly to market changes. Following […]
Author: Dan Brecher
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Sign up to get the latest from our attorneys!
Explore What Matters Most to You.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.