The New York Times has a piece this morning about how the Keeter family, owners of Royal Oak Charcoal, invested $188 million in KPMG-sponsored "bogus" tax shelters. They aren't happy. They are now suing KPMG.
The tax shelter the Keeters bought was named Blips, for bond linked investment premium strategy. Never valid in the eyes of the Internal Revenue Service, Blips was one of four abusive tax shelters that the Senate Permanent Subcommittee on Investigations in 2003 found that KPMG had sold to at least 350 people from 1997 to 2001, earning fees of $124 million. Those shelters cost the Treasury at least $1.4 billion in unpaid taxes, according to the subcommittee.
$188 million. That's a lot of charcoal.
One family member made a statement that is certain to be used in KPMG's defense:
Still, Steven Keeter, 46, Daren's brother, said that the huge tax bills and the litigation had not caused tensions within the family. "It hasn't really changed things between us," he said, referring to the tax shelter. "We are business people, and it was a calculated risk."
KPMG is likely to say this is evidence that the shelter is merely tax between consenting adults. You pays your $188 million, you takes your chances...
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