This website uses cookies to ensure you have the best experience. Learn more

Article Summary Essay

1775 words - 8 pages

AbstractThis paper will discuss a business dispute between KPMG and the IRS. It will identify the "legal issue in dispute" as well as the legal process that was used to resolve the issue, and "how that process fits into the court structure" (Augenstein). Then, it will explain the civil and criminal aspects of the dispute. The paper will "compare and contrast possible outcomes if the dispute could be heard in both a criminal and a civil case", while addressing the differences between these types of actions (Augenstein).Dispute SummaryOn August 26, 2005, the Justice Department and KPMG settled their longrunning dispute over KPMG's aggressive tax shelters. After over seven years of legal ...view middle of the document...

A civil case can be filed alleging negligence can be filed against an accountant who fails to meet his or her obligations under GAAP and GAAS, as well as against the accountant's firm. A civil action can result in substantial penalties, and may include both compensatory and punitive damages. Federal law also provides for criminal penalties for violating accounting standards. The 1976 Tax Reform Act "imposes criminal liability on accountants and others who prepare federal tax returns" (Cheesman). This criminal liability extends both to individuals and companies, although the federal government has not usually brought charges against partners in the past. In the case of abusive tax shelters, it has often been difficult for court's to "draw sharp lines between legitimate tax planning and illicit shelters", as "most abusive shelters are based on legal tax-planning techniques- but carried to extremes" (Business Week). However, a finding of criminal liability on the part of an accounting firm could lead to substantial monetary damages and for all intents and purposes could put a firm out of business. In the case of an individual, a finding of criminal liability could result in monetary damages and even jail time.Let us now return to the specifics of the KPMG case. Much as in the case of Arthur Anderson, it was the lure of profits that tempted KPMG to violate its fiduciaryduty to use "reasonable care, knowledge, skill, and judgment" (Cheesman). KPMG became increasingly aggressive throughout the 1990's in its implementation of taxshelters. The government alleges that KPMG crossed the line between 1996 and 2003, committing "tax-shelter fraud by selling illicit deals and then misleading the IRS aboutthe transactions" on behalf of wealthy individuals (Business Week). KPMG created tax shelters that were "allegedly designed to create phony losses that investors could use to reduce their taxes" (Business Week). The IRS maintains that these tax shelters are illegal, but "the courts have not yet ruled on the matter" (Business Week). The IRS uses the economic substance test to evaluate the legality of tax shelters. This doctrine holdsthat tax shelters are improper if they are "done solely to reduce taxes" (Business Week).However, federal courts have not consistently ruled in favor of the IRS on such matters, sometimes allowing tax shelters "even if they carry no economic risk or opportunity for reward beyond their tax savings" (Business Week).The past reluctance of the courts to take a definitive stance on aggressive tax shelters may have contributed to KPMG's current problems. When the IRS began investigating KPMG, it responded largely by stonewalling. The company "filed scores of procedural documents supporting KPMG's assertion that it did not need to turn over thetax shelter documents" (New York Times). In fact, "they were so effective at resisting the requests" that by July 2002 "the Justice Department had filed a civil lawsuit against the firm seeking to...

Find Another Essay On Article Summary

Article Summary Essay

802 words - 4 pages In the Article “Demand For Barefoot Shoes Cools Considerably, With Sales Down 47% This Year” It tells us that the shoe that not so long ago was popular among runners, joggers and work out enthusiasts is now has sales that have plummeted 47% from last year. Sara Germano, a journalist of the from the Wall Street Journal wrote cited information from Spots One Source, stated that the barefoot shoe industry “was the only dominate industry” to have

Article summary Essay

649 words - 3 pages This paper will discuss a business dispute between Intel and AMD brought through the hurt of consumers by illegally coercing computer makers to use the chips. It will identify the legal issue in dispute as well as the legal process that was used to resolve the issue, and how that process fits into the court structure. Then it will explain the civil and criminal aspects of the dispute. The paper will then compare and contrast possible outcomes if

Critical Thinking Article Summary and Critique for MGT350

664 words - 3 pages purpose of the summary and critique of this article is to engage in asking critical questions and examining some of the ideological assumptions. To verify one understands the message to reduce uncertainty and to ask for confirmation.ReferencesAlwasilah, A.C. (2002). Critical Thinking Crucial to Global Success. JAKARTA POST, 05/02/2002. Retrieved October 15, 2003, from EBSCOhost database (Business Source Premier) on the World Wide Web:

A summary and response to an article regarding pornography

1024 words - 4 pages Summary and Response"Why We Must Put Up with Porn" by Susan Isaacs The editorial "Why We Must Put Up with Porn" by Susan Isaacs is about pornography and the Constitution. The First Amendment states that we, as American citizens, have the freedom of speech. "To have the speech we love, we must defend the speech we hate," Isaacs voices.Isaacs states in her article, that there is no proof that pornography contributes to criminal behavior

TechWeb News Article summary

415 words - 2 pages In an article by, they report that doctor's are now using Macromedia's Flash technology as a way to create their program Blue Iris. Blue Iris is a way to look up test results, prescribe medications, check medical histories, and even add diagnosis and treatment information to a patient's records. Flash seemed to be a better fit than their alternative's, Microsoft's .net, and Java software.Mite Corp. is experienced in Java, and

Research Article Summary

672 words - 3 pages The tittle of the article that is being summarized is “How Attributional Ambiguity Shapes Physiological and Emotional Responses to Social Rejection and Acceptance”. The article is about four students whom in their research; explored how social rejection and acceptance are perceived, are responded to, and affect an ongoing social interaction between same-race or different-race interaction partners. In other words the article is about how people

Article Summary 2

624 words - 3 pages The United States if one of the few countries that stands in opposition of legal prostitution. Those who advocate the decriminalization of prostitution believe it should be done so by regulating and licensing prostitutes, claiming that “…legalizing would eliminate the criminal element of the trade, leading to safer working conditions and better health for both prostitutes and their clients.” (Sexton & Cushman, 2013) In the perception of

Article Summary #4

745 words - 3 pages Whether we like it or not, at some point all of us must visit a doctor or physician, but before that can happen, we have to find one. However, this task is often easier said than done. It is important to find a physician who possesses certain qualities so that one will benefit in the long term because-let’s face it-when it comes to health, nothing should be taken lightly. How does one go about finding a fitting doctor, then? In an article by

Article Summary 2

762 words - 4 pages spread awareness, using her story as an example of what not to do and hoping that others, unlike herself, don’t learn the hard way. This article is a good example of awareness on an issue that some people might not be taking seriously. In my opinion, it is definitely a lesson on what not to do. I think it is good in the fact that it raises awareness to the dangers of synthetic drugs, but it is bad in that so many teenagers have ended their lives

Summary of William Lugo's Article

876 words - 4 pages In his article "Violent Video Games Recruit American Youth" from the journal Reclaiming Children and Youth, William Lugo raises awareness of the US Army's use of video games as a tool to recruit young gamers while arguing against the lack of ethics used in this technique. William Lugo introduces his article by describing a stunning event in which armed soldiers repell out of Black Hawk helicopters and surround Los Angeles' convention center to

Critical Thinking Article Summary and Critique

526 words - 2 pages PerceptionThe author through this article has clearly understood and revealed the reasons for the poor language education curriculum. He believes that the Indonesian students are left behind due to the lack of variety and process in the their curriculum. The author also mentions reconstructing the perception of the essence of the language education, especially on the part of teachers, bureaucrats and college professors. The article also

Similar Essays

Flanking In A Price War Article Summary

1614 words - 6 pages Flanking in a Price War Article Summary The article begins by giving a brief analysis of a study that was conducted in Quebec in the early 1980’s involving the grocery industry. It discusses a point of time before the leader in market share, Steinberg, Inc., initiated a price war. One of the authors of the article, Roger J Calantone, was involved in an experiment with one of the smaller grocery chains, IGA. The experiment was designed to

Article Summary Essay

1211 words - 5 pages In their research article, When Too Much is Not Enough: Obsessive-Compulsive Disorder as a Pathology of Stopping, Rather Than Starting,” Hinds, Woody, Ameringen, Schmidt and Szechtman (2012) suggest that obsessive-compulsive disorder (OCD) is a stopping problem, or a failure to shut down security-related thoughts and actions. This is in contrast to the popular concept that OCD is a starting problem in which the level of excitation in response to

Article Summary Essay

1000 words - 4 pages This article presents the argument of widespread use of the direct method with regards to presenting a statement of cash flows. In the author’s research they found that many balance sheets and cash flow statements do not articulate. Changes in the current asset and liability account balances are often presented significantly different on the cash flow statement than on the balance sheet. Upon examining a sample of approximately 10,000 sets of

Article Summary Essay 988 Words

988 words - 4 pages accustomed to just by simulating physical invulnerability like a superpower. The thought of possessing a superpower has had people thinking and wondering how life would be different. How would possessing a particular power influence someone’s life compared to another specific superpower? The article connects the idea that having a superpower that makes someone invulnerably to physical pain, would minimize the effects of being excluded from a group