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
Breaking Down New Jersey’s “Mansion” Tax: What Buyers and Sellers Need to Know
For many years, the New Jersey Mansion Tax has been a significant consideration in high-value real estate transactions. Recent legislative changes, however, have substantially altered how the tax operates, including who is responsible for paying it and the amount owed in certain transactions. Whether you are purchasing, selling, or investing in New Jersey real estate, […]
Author: George McGowan
Estate Planning for Digital Assets Under New Jersey Law
As our personal and financial lives increasingly move online, estate planning must evolve to address a new category of property: digital assets. From email accounts and social media profiles to cryptocurrency and cloud-stored business records, these assets often carry both financial and sentimental value. Yet, without proper planning, they can become inaccessible—or even lost—upon incapacity […]
Author: Marc J. Comer
The Role of Representation and Warranty Insurance in M&A Transactions
In today’s mergers and acquisitions market, representation and warranty (R&W) insurance has become a common feature of deal negotiations. Once used primarily in larger transactions, R&W insurance is now frequently incorporated into middle-market deals as buyers and sellers look for efficient ways to allocate risk and close deals. When structured properly, R&W insurance can help […]
Author: George McGowan
You Just Received a Federal Grand Jury Subpoena in New Jersey: Now What?
Receiving a federal grand jury subpoena is not something most businesses or individuals anticipate. While it can be concerning, a federal grand jury subpoena does not necessarily mean that you are being accused of wrongdoing. It does, however, mean that a federal criminal investigation is underway and that federal prosecutors believe you may possess information […]
Author: George McGowan
Why Every Business Should Conduct an Annual Insurance Coverage Review
Most New Jersey business owners purchase insurance policies, file them away, and assume they are protected if a claim arises. Without a regular insurance coverage review, many companies discover gaps only after a lawsuit, cyberattack, property loss, or other significant event occurs. An annual insurance coverage review can help businesses identify potential risks, ensure their […]
Author: George McGowan
Demand Letters & Cease and Desist Letters: When to Send One (and When Not To)
Businesses and individuals often encounter situations where another party breaches a contract, fails to pay a debt, or continues harmful conduct. In many such disputes, a precisely drafted demand letter or cease-and-desist letter serves as a powerful legal tool. It can frequently resolve the dispute and avoid litigation. While demand or cease-and-desist letters can resolve […]
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.