Many of the largest companies in the United States used a controversial KPMG tax shelter that the Internal Revenue Service subsequently ruled was abusive.
In the past, the IRS publicly stated that the shelters generated at least $1.7 billion in tax savings for several dozen companies.
The shelters at the center of the storm use what’s known as a “contested liability acceleration strategy,” or CLAS, designed to help companies accelerate the timing of tax deductions for settlements of lawsuits or other claims.
On Wednesday, The Wall Street Journal named names, citing previously undisclosed KPMG documents from 1999 through 2001.
Among the companies that used the shelter were Delta Air Lines Inc., Whirlpool Corp., Clear Channel Communications Inc., WorldCom Inc., Tenet Healthcare Corp., and the U.S. units of AstraZeneca Plc and Fresenius Medical Care AG, according to the Journal. The paper added that Qwest Communications International Inc., Washington Mutual Inc., Global Crossing Ltd., Lennar Corp., and the U.S. units of Cemex SA and Siemens AG signed agreements to buy the shelter, but it is not clear that they implemented it.
The Journal stressed that there is no indication that any of the corporate users are being criminally investigated.
According to the Journal, KPMG spokesman Thomas Fitzgerald said that the firm “provides tax services to audit clients as permitted by the SEC’s auditor independence rules and consistent with all applicable professional and regulatory rules as well as the client’s own policies” but provided no further comment.