Tax
Ernst & Young Under the Spotlight Again for Dubious Tax Shelters

Global professional services firm Ernst and Young is being sued in the US District Court in Manhattan by a Florida couple who allege that th...
Global professional services firm Ernst and Young is being sued in the US District Court in Manhattan by a Florida couple who allege that they were sold a tax strategy even though it had "no legitimate purpose other than as a vehicle for tax avoidance". In what could become the basis of a class action, the couple, Rocco and Mary Abessinio, allege that E&Y owes them more than $40 million as a result of additional tax that the couple had to pay for tax years 2001 and 2002, after the Internal Revenue Service challenged a tax sheltering arrangement sold to them by the firm. The strategy, known as a personal investment company, or PICO, had been used in at least 90 cases with E&Y reportedly earned $5.9 million in fees, according to Reuters. Under a 2003 settlement with the IRS, E&Y agreed to disband the group which sold the PICO tax arrangements and to pay a $15 million fine.