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
“No Comment” Culture: Why Silence Is Often the Riskiest Legal Strategy
A “no comment” response is sometimes the right call when a legal problem arises. As a blanket policy, however, it lets allegations go unanswered, deadlines pass, evidence disappear, and manageable disputes grow into expensive litigation. The businesses that fare best are usually the ones that say little publicly while acting decisively behind the scenes. When […]
Author: Sean M. Pena
Utility-Scale Battery Storage Projects: A Legal Roadmap for Developers, Property Owners and Other Stakeholders
Utility-scale battery energy storage systems (BESS) are becoming an increasingly important component of the electric grid throughout New Jersey, New York, and Pennsylvania. As renewable generation expands, electricity demand increases and grid operators seek greater flexibility, battery storage can help balance supply and demand while providing additional capacity and reliability. For developers, battery storage presents […]
Author: Nicholas Wall
Navigating Disputes: Hire a Partnership Dispute Lawyer
A falling out between partners can be disastrous for any business. In many cases, the partnership will not survive. If you are in an unworkable situation with your partners, it may be time to consult a partnership dispute lawyer experienced in handling partnership breakups and dissolutions before the situation deteriorates any further. It is easy […]
Author: Jay McDaniel
Section 363 Sales in Bankruptcy: What Businesses, Lenders, and Buyers Need to Know
When a company enters Chapter 11 bankruptcy, many assume the process will culminate in a lengthy reorganization plan. However, distressed businesses are increasingly being sold through a different mechanism — a sale under Section 363 of the United States Bankruptcy Code. A Section 363 sale allows a company, as a debtor-in-possession in bankruptcy, to sell […]
Author: John D. Giampolo
Zoning Laws Explained: What You Need to Know Before Buying Property
Before buying property, it is critical to determine whether local zoning laws may affect your plans. If you plan to redevelop the property, you will want to confirm that local zoning regulations permit development as intended. If acquiring property that is already developed, you must verify that the use is permitted in the underlying zoning […]
Author: Wendy Rubinstein Quiroga
Special Needs Trusts in New Jersey: Planning for Your Loved One’s Future
For parents of a child with a disability, estate planning raises concerns that go well beyond deciding who will inherit their assets. Parents may spend years making sure their child has the right care, services, and support. Eventually, they must also confront a difficult question: Who will take over when they can no longer do […]
Author: George McGowan
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.