Ernst & Young Sued Over Tax Shelter

Law360, New York (February 16, 2007, 12:00 AM EST) -- Silicon Valley executives have accused accounting firm Ernst & Young of entangling them in a tax shelter scheme that cost them millions of dollars in damages after the Internal Revenue Service found such strategies illegal.

Between 1999 and 2000, the executives invested more than $51 million into Ernst and Young’s Contingent Deferred Swap Tax Strategy, which allowed investors to create their own limited partnerships that were to be dissolved once tax benefits had been realized.

“In soliciting plaintiffs to invest in CDS, the Ernst & Young...
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