An accounting firm has admitted its part in a large-scale tax fraud investigation and reached a deal with the government to pay $50 million in a deferred prosecution agreement. BDO USA, formerly BDO Seidman, admitted to assisting wealthy taxpayers in fraudulent tax shelter transactions meant to defraud the IRS from some $1.3 million in income taxes.
The charge of tax fraud conspiracy leveled against BDO will likely be dropped in six months, so long as the accounting firm meets all the requirements of the deal reached with the government. This means continued cooperation in the investigation, along with implementing a compliance and ethics program within the company. California accounting firms may well wish to make sure they have similar programs in the wake of this incident.