Confidence Games
Lawyers, Accountants, and the Tax Shelter Industry
Tanina Rostain ; Milton C. Regan Jr.
- The
- rise
- and
- fall
- of
- a
- tax
- shelter
- industry
- that
- enabled
- some
- of
- America's
- richest
- citizens
- to
- avoid
- paying
- their
- fair
- share
- of
- taxes.For
- ten
- boom-powered
- years
- at
- the
- turn
- of
- the
- twenty-first
- century,
- some
- of
- America's
- most
- prominent
- law
- and
- accounting
- firms
- created
- and
- marketed
- products
- that
- enabled
- the
- very
- rich—including
- newly
- minted
- dot-com
- millionaires—to
- avoid
- paying
- their
- fair
- share
- of
- taxes
- by
- claiming
- benefits
- not
- recognized
- by
- law.
- These
- abusive
- domestic
- tax
- shelters
- bore
- such
- exotic
- names
- as
- BOSS,
- BLIPS,
- and
- COBRA
- and
- were
- developed
- by
- such
- prestigious
- firms
- as
- KPMG
- and
- Ernst
- &
- Young.
- They
- brought
- in
- hundreds
- of
- millions
- of
- dollars
- in
- fees
- from
- clients
- and
- bilked
- the
- U.S.
- Treasury
- of
- billions
- in
- revenues
- before
- the
- IRS
- and
- Justice
- Department
- stepped
- in
- with
- civil
- penalties
- and
- criminal
- prosecutions.
- In
- Confidence
- Games,
- Tanina
- Rostain
- and
- Milton
- Regan
- describe
- the
- rise
- and
- fall
- of
- the
- tax
- shelter
- industry
- during
- this
- period,
- offering
- a
- riveting
- account
- of
- the
- most
- serious
- episode
- of
- professional
- misconduct
- in
- the
- history
- of
- the
- American
- bar.Rostain
- and
- Regan
- describe
- a
- beleaguered
- IRS
- preoccupied
- by
- attacks
- from
- antitax
- and
- antigovernment
- politicians;
- heightened
- competition
- for
- professional
- services;
- the
- relaxation
- of
- tax
- practitioner
- norms
- against
- aggressive
- advice;
- and
- the
- creation
- of
- complex
- financial
- instruments
- that
- made
- abusive
- shelters
- harder
- to
- detect.
- By
- 2004,
- the
- tax
- shelter
- boom
- was
- over,
- leaving
- failed
- firms,
- disgraced
- professionals,
- and
- prison
- sentences
- in
- its
- wake.
- Rostain
- and
- Regan's
- cautionary
- tale
- remains
- highly
- relevant
- today,
- as
- lawyers
- and
- accountants
- continue
- to
- face
- intense
- competitive
- pressure
- and
- regulators
- still
- struggle
- to
- keep
- pace
- with
- accelerating
- financial
- risk
- and innovation.
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