A New Jersey partner of a national accounting firm -- apparently BDO Seidman -- has been accused of advising a client to make phony lease payments on a yacht to evade taxes. The Justice Department announced the indictment of Stephen Favato yesterday. From the press release:
According to the indictment, Favato advised the client to significantly reduce the salary payments that the client was receiving from the corporation and to instead have this compensation paid to the client's limited liability company, Great Escape Yachts LLC, in the form of purported lease payments for the client's yacht. However, the corporation had not leased the yacht. This recommended course of action enabled the client to fraudulently deduct personal yacht expenses as business expenses.
This charge doesn't appear to be related to the recent guilty plea of another BDO figure in a tax shelter case.
Clearly, working for a big firm doesn't make you immune from serious trouble with the IRS.
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