Senate Hearing, 108TH Congress - U.S. Tax Shelter Industry: The Role of Accountants, Lawyers, and Financial Professionals

S. Hrg.
108473
U.S. TAX SHELTER INDUSTRY: THE ROLE OF

ACCOUNTANTS, LAWYERS, AND FINANCIAL
PROFESSIONALS
HEARINGS
BEFORE THE
PERMANENT SUBCOMMITTEE ON INVESTIGATIONS

OF THE
COMMITTEE ON
GOVERNMENTAL AFFAIRS
UNITED STATES SENATE
ONE HUNDRED EIGHTH CONGRESS
FIRST SESSION
NOVEMBER 18 AND 20, 2003
VOLUME 2 OF 4
Printed for the use of the Committee on Governmental Affairs
VerDate 0ct 09 2002 10:03 Jun 22, 2004 Jkt 094084 PO 00000 Frm 00001 Fmt 6011 Sfmt 6011 C:\DOCS\94084.TXT SAFFAIRS PsN: PHOGAN
U.S. TAX SHELTER INDUSTRY: THE ROLE OF ACCOUNTANTS,
LAWYERS, AND FINANCIAL PROFESSIONALS
S. Hrg. 108473
U.S. TAX SHELTER INDUSTRY: THE ROLE OF

ACCOUNTANTS, LAWYERS, AND FINANCIAL
PROFESSIONALS
HEARINGS
BEFORE THE

OF THE
COMMITTEE ON
GOVERNMENTAL AFFAIRS
UNITED STATES SENATE
ONE HUNDRED EIGHTH CONGRESS
FIRST SESSION
NOVEMBER 18 AND 20, 2003
VOLUME 2 OF 4
Printed for the use of the Committee on Governmental Affairs
(
U.S. GOVERNMENT PRINTING OFFICE
94084 PDF WASHINGTON : 2004
For sale by the Superintendent of Documents, U.S. Government Printing Office

Internet: bookstore.gpo.gov Phone: toll free (866) 5121800; DC area (202) 5121800
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COMMITTEE ON GOVERNMENTAL AFFAIRS
SUSAN M. COLLINS, Maine, Chairman
TED STEVENS, Alaska JOSEPH I. LIEBERMAN, Connecticut
GEORGE V. VOINOVICH, Ohio CARL LEVIN, Michigan
NORM COLEMAN, Minnesota DANIEL K. AKAKA, Hawaii
ARLEN SPECTER, Pennsylvania RICHARD J. DURBIN, Illinois
ROBERT F. BENNETT, Utah THOMAS R. CARPER, Delaware
PETER G. FITZGERALD, Illinois MARK DAYTON, Minnesota
JOHN E. SUNUNU, New Hampshire FRANK LAUTENBERG, New Jersey
RICHARD C. SHELBY, Alabama MARK PRYOR, Arkansas
MICHAEL D. BOPP, Staff Director and Chief Counsel

JOYCE A. RECHTSCHAFFEN, Minority Staff Director and Counsel
AMY B. NEWHOUSE, Chief Clerk

NORM COLEMAN, Minnesota, Chairman
TED STEVENS, Alaska CARL LEVIN, Michigan
GEORGE V. VOINOVICH, Ohio DANIEL K. AKAKA, Hawaii
ARLEN SPECTER, Pennsylvania RICHARD J. DURBIN, Illinois
ROBERT F. BENNETT, Utah THOMAS R. CARPER, Delaware
PETER G. FITZGERALD, Illinois MARK DAYTON, Minnesota
JOHN E. SUNUNU, New Hampshire FRANK LAUTENBERG, New Jersey
RICHARD C. SHELBY, Alabama MARK PRYOR, Arkansas
RAYMOND V. SHEPHERD, III, Staff Director and Chief Counsel

ELISE J. BEAN, Minority Staff Director and Chief Counsel
ROBERT L. ROACH, Minority Counsel and Chief Investigator
MARY D. ROBERTSON, Chief Clerk
(II)
CONTENTS
Opening statements: Page

Senator Coleman .............................................................................................. 1, 69
Senator Levin .................................................................................................... 4, 72
Senator Lautenberg .......................................................................................... 9
WITNESSES
TUESDAY, NOVEMBER 18, 2003

Debra S. Petersen, Tax Counsel IV, California Franchise Tax Board, Rancho
Cordova, California .............................................................................................. 11
Mark T. Watson, former Partner, Washington National Tax, KPMG LLP,
Washington, DC ................................................................................................... 13
Calvin H. Johnson, Andrews & Kurth Centennial Professor, The University
of Texas at Austin School of Law, Austin, Texas .............................................. 14
Philip Wiesner, Partner in Charge, Washington National Tax, Client Services,
KPMG LLP, Washington, DC ............................................................................. 32
Jeffrey Eischeid, Partner, Personal Financial Planning, KPMG LLP, Atlanta,
Georgia .................................................................................................................. 32
Richard Lawrence DeLap, Retired National Partner in Charge, Department
of Professional Practice-Tax, KPMG LLP, Mountain View, California ........... 34
Larry Manth, former West Area Partner in Charge, Stratecon, KPMG LLP,
Los Angeles, California ........................................................................................ 34
Richard J. Berry, Senior Tax Partner, Pricewaterhouse Coopers, New York,
New York .............................................................................................................. 54
Mark A. Weinberger, Vice Chair, Tax Services, Ernst & Young LLP, Wash-
ington, DC ............................................................................................................. 55
Richard H. Smith, Jr., Vice Chair, Tax Services, KPMG LLP, New York,
New York .............................................................................................................. 57
THURSDAY, NOVEMBER 20, 2003

Raymond J. Ruble, former Partner, Sidley Austin Brown and Wood, LLP,
New York, New York, represented by Jack Hoffinger ...................................... 76
Thomas R. Smith, Jr., Partner, Sidley Austin Brown and Wood, New York,
New York .............................................................................................................. 77
N. Jerold Cohen, Partner, Sutherland Asbill and Brennan, LLP, Atlanta,
Georgia, accompanied by J.D. Fleming .............................................................. 79
William Boyle, former Vice President, Structured Finance Group, Deutsche
Bank AG, New York, New York ......................................................................... 95
Domenick DeGiorgio, former Vice President, Structured Finance, HVB Amer-
ica, Inc., New York, New York, accompanied by Brian Skarlatos ................... 97
John Larson, Managing Director, Presidio Advisory Services, San Francisco,
California .............................................................................................................. 114
Jeffrey Greenstein, Chief Executive Officer, Quellos Group, LLC, formerly
known as Quadra Advisors, LLC, Seattle, Washington .................................... 115
Mark Everson, Commissioner, Internal Revenue Service, Washington, DC ...... 128
William J. McDonough, Chairman, Public Company Accounting Oversight
Board, Washington, DC ....................................................................................... 130
Richard Spillenkothen, Director, Division of Banking Supervision and Regula-
tion, The Federal Reserve, Washington, DC ...................................................... 131
(III)
IV
Page
ALPHABETICAL LIST OF WITNESSES
Berry, Richard J.:
Testimony .......................................................................................................... 54
Prepared statement .......................................................................................... 303
Boyle, William:
Testimony .......................................................................................................... 95
Prepared statement with an attachment ....................................................... 317
Cohen, N. Jerold:
Testimony .......................................................................................................... 79
Letter dated November 18, 2003, submitted with answers to questions ..... 315
DeGiorgio, Domenick:
Testimony .......................................................................................................... 97
DeLap, Richard Lawrence:
Testimony .......................................................................................................... 34
Eischeid, Jeffrey:
Testimony .......................................................................................................... 32
Everson, Mark:
Testimony .......................................................................................................... 128
Prepared statement with an attached chart .................................................. 338
Greenstein, Jeffrey:
Testimony .......................................................................................................... 115
Johnson, Calvin H.:
Testimony .......................................................................................................... 14
Manth, Larry:
Testimony .......................................................................................................... 34
Larson, John:
Testimony .......................................................................................................... 114
McDonough, William J.:
Testimony .......................................................................................................... 130
Petersen, Debra S.:
Testimony .......................................................................................................... 11
Ruble, Raymond J.:
Testimony .......................................................................................................... 76
Smith, Richard H., Jr.:
Testimony .......................................................................................................... 57
Smith, Thomas R., Jr.:
Testimony .......................................................................................................... 77
Spillenkotchen, Richard:
Testimony .......................................................................................................... 131
Watson, Mark T.:
Testimony .......................................................................................................... 13
Weinberger, Mark A.:
Testimony .......................................................................................................... 55
Wiesner, Philip:
Testimony .......................................................................................................... 32
V
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APPENDIX
Minority Staff Report of the Permanent Subcommittee on Investigations enti-
tled, U.S. Tax Shelter Industry: The Role of Accountants, Lawyers, and
Financial Professionals, Four KPMG Case Studies: FLIP, OPIS, BLIPS,
and SC2, released in conjunction with the Permanent Subcommittee on
Investigations hearings on November 18 and 20, 2003, S. Prt. 10834 ......... 145
I. INTRODUCTION ............................................................................................... 145

II. FINDINGS ......................................................................................................... 147
III. EXECUTIVE SUMMARY .............................................................................. 149
A. Developing New Tax Products ................................................................ 151
B. Mass Marketing Tax Products ................................................................ 152
C. Implementing Tax Products .................................................................... 153
D. Avoiding Detection ................................................................................... 157
E. Disregarding Professional Ethics ............................................................ 159
IV. RECOMMENDATIONS ................................................................................. 160
V. OVERVIEW OF U.S. TAX SHELTER INDUSTRY ..................................... 162
A. Summary of Current Law on Tax Shelters ............................................ 162
B. U.S. Tax Shelter Industry and Professional Organizations ................. 164
VI. FOUR KPMG CASE HISTORIES ................................................................ 166
A. KPMG In General .................................................................................... 166
B. KPMGs Tax Shelter Activities ............................................................... 168
(1) Developing New Tax Products ............................................................ 172
(2) Mass Marketing Tax Products ............................................................ 188
(3) Implementing Tax Products ................................................................ 206
a. KPMGs Implementation Role ........................................................ 206
b. Role of Third Parties in Implementing KPMG Tax Products ...... 215
(4) Avoiding Detection ............................................................................... 235
(5) Disregarding Professional Ethics ....................................................... 245
APPENDIX A
CASE STUDY OF BOND LINKED ISSUE PREMIUM STRUCTURE
(BLIPS) .......................................................................................................... 255
APPENDIX B
CASE STUDY OF S-CORPORATION CHARITABLE CONTRIBUTION
STRATEGY (SC2) ......................................................................................... 266
APPENDIX C
OTHER KPMG INVESTIGATIONS OR ENFORCEMENT ACTIONS ....... 270
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EXHIBIT LIST
Volume 1
1. a. BLIPS: Bond Linked Issue Premium Structure, PowerPoint presen-
tation with eight slides prepared by the Permanent Subcommittee
on Investigations ...................................................................................... 371
b. SC2, PowerPoint presentation with five slides prepared by the Per-
manent Subcommittee on Investigations .............................................. 379
c. Mass Marketing of Tax Shelters, chart prepared by the Permanent
Subcommittee on Investigations ............................................................. 384
d. Knowledge of Counter Parties, chart prepared by the Permanent
Subcommittee on Investigations ............................................................ 385
2. KPMG Memorandum, February 1998, re: Summary and observations
of OPIS ............................................................................................................ 386
3. KPMG Memorandum, May 1998, re: OPIS Tax Shelter Registration ........ 393
4. Gibson, Dunn & Crutcher LLP Memorandum to KPMG, March 2000,
re: BLIPS Tax Opinion ................................................................................... 400
5. KPMG email, April 1999, re: BLIPS (The original intent of the parties
was to participate in all three investment stages of the Investment Pro-
gram. It seems to me that this is a critical element of the entire analysis
and should not be blithely assumed as a fact. If it is true, I think
it should be one of the investors representations. However, I would
caution that if there were, say, 50 separate investors and all 50 bailed
out of at the completion of Stage I, such a representation would not
seem credible.) ................................................................................................. 408
6. KPMG email, February 2000, re: Product champions needed for S Corp
strategy (I want to personally thank everyone for their effort during
the approval process of this strategy. It was completed very quickly
and everyone demonstrated true teamwork. Thank you! Now lets SELL,
SELL, SELL!!) ................................................................................................ 412
7. KPMG email, February 2000, re: BLIPS/OPIS (. . . the sooner we get
them out the door the better since the lawespecially the primary profit
motive testis evolving daily and not in a taxpayer friendly manner.
* * * As I understand the facts, all 66 closed out by year-end and
triggered the tax loss.) .................................................................................... 415
8. KPMG email, February 2001, re: SC2 SolutionNew Development
(Quick SnapshotWe are now offering a modified SC2 solution. S Corp
shareholders can use the structure of direct significant gift to 501(c)(3)
tax exempts of their choice. Net tax benefit is less than original SC2
. . . shareholder feel good factor is higher. We need targets and ICVs.
* * * Look at the last partner scorecard. Unlike golf, a low number
is not a good thing. . . . A lot of us need to put more revenue on
the board before June 30. SC2 can do it for you. Think about targets
in your area and call me.) .............................................................................. 423
9. KPMG email, June 2000, re: Revised SC2 Script, Rosenthal/Stein ap-
proval of SC2 calling script ............................................................................ 426
10. KPMG emails, September 1998, January 1999, and October 2000 re:
Grantor Trust Issue and KPMG Memorandum of Telephone Call, May
2000, re: Grantor Trust Issue (So our best intelligence is that you are
increasing your odds of being audited, not decreasing your odds by
filing that Grantor Trust return. So we have discontinued doing that.) .... 428
11. KPMG email, March 1998, re: Simon Says (. . . and yet in truth the
option was really illusory and stood out more like a sore thumb since
no one in his right mind would pay such an exorbitant price for such
a warrant.) ...................................................................................................... 439
12. Email, May 1999, re: Who is the Borrower in the BLIPS transaction
(Based on your analysis below, do you conclude that the tax results
sought by the Investor are NOT more likely than not to be realized?
* * * Yes.) ....................................................................................................... 448
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13. Email, August 1999, re: BLIPS (However, before engagement letters are
signed and revenue is collected, I feel it is important to again note
that I and several other WNT [Washington National Tax] partners re-
main skeptical that the tax results purportedly generated by a BLIPS
transaction would actually be sustained by a court if challenged by
the IRS.) ........................................................................................................... 450
14. KPMG email, May 1998, re: OPIS Tax Shelter Registration (If for some
reason the IRS decides to get tough with someone vis-a-vis the old
rules, I suspect it could easily pick on ANY of the Big 6, or for that
matter any number of law firms/promotersI dont think we want to
create a competitive DISADVANTAGE, nor do we want to lead with
our chin.) ......................................................................................................... 451
15. KPMG email, December 1998, re: OPIS (After December 31, 1998, there
will be no marketing of OPIS in any circumstances.) .................................. 452
16. KPMG email, July 1999, re: National Accounts Database (VALUE
PROPOSITION: . . . The all-in cost of the program, assuming a com-
plete loss of investment principal, is 7% of the targeted tax loss (pre-
tax). The tax benefit of the investment program, which ranges from
20% to 45% of the targeted tax loss, will depend on the taxpayers
effective tax rates. FEE: BLIPS is priced on a fixed fee basis which
should approximate 1.25% of the tax loss. Note that this fee is included
in the 7% described above.) ............................................................................ 453
17. KPMG email, August 1999, re: BLIPs (Depicting the approval of BLIPS
and views of some at KPMG about the strategy.) ....................................... 455
18. KPMG email, September 1999, re: BLIPS 2000 (A number of people
are looking at doing BLIPS transactions to generate Y2K losses. We
currently have bank capacity to have $1 billion of loans outstanding
at 12/31/99. This translates into approximately $400 million of pre-
mium. This tranche will be implemented on a first-come, first-served
basis until we fill capacity. Get your signed engagement letters in!!) ......... 459
19. KPMG email, February 2000, re: Hot Tax Products (5 Month Mission)
(Thanks for help in this critically important matter. As Jeff [Stein]
said, We are dealing with ruthless executionhand to hand combat
blocking and tackling. Whatever the mixed metaphor, lets just do it.) ..... 460
20. KPMG email, April 2000, re: SC2 (There have been several successes
the West and South Florida with many ICVs in other parts of the
country. We are behind. This is THE STRATEGY that they expect signifi-
cant value added fees by June 30. The heat is on. . . .) .............................. 463
21. KPMG Document, SC2Meeting Agenda June 19th, 2000 ......................... 464
22. KPMG email, July 2000, re: Attaching memorandum to Tax Partners
and Tax Management Group. re: Selling with Confidence: Skills for
Successful SellingPositioning. ................................................................. 486
23. KPMG email, August 2000, re: Solution Activity ReportsSC2 (Our
team of telemarketers is particularly helpful in a number of respects:
to further qualify prospects; to set up phone appointments for you
and your deployment team.) ........................................................................... 488
24. KPMG email, November 2000, re: SW SC2 Channel Conflict (Attached
is a list of SC2 targets in the Southwest that we are including in
an upcoming telemarketing program.) .......................................................... 490
25. KPMG email, December 2000, re: STRATECON WESTKICK OFF
PLAN FOR 01 (. . . we must aggressively pursue these high-end strate-
gies.) ................................................................................................................. 492
26. KPMG email, March 2001, re: Fridays Stratecon Call (Due to the signifi-
cant push for year-end revenue, all West Regional Federal tax partners
have been invited to join us on this call and we will discuss our Quick
Hit strategies and targeting criteria.) .......................................................... 494
27. KPMG email, April 2001, re: Fridays Stratecon Call (The [tax] strategies
have a quick revenue hit for us, . . .) ............................................................ 495
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28. KPMG email, May 1999, re: Marketing BLIPS (One does not need to
understand how the program is structured to determine whether someone
has sufficient gain and has the tax risk appetite to do an OPIS/BLIPS
type strategy.) .................................................................................................. 496
29. KPMG email, September 1999, re: BLIPSmanaging deal flow (As you
know, we have until 10/15 at the latest to close loans and 10/22 to
activate the FX trading etc. (the 60 day countdown).) ................................. 499
30. KPMG email, October 1999, re: BLIPS (18 OPIS slots were reserved
for the intended BLIPS participants noted in the third paragraph
below.) .............................................................................................................. 500
31. KPMG email, November 1999, re: BLIPS (It occurs to me that it would
be useful to know something about the investment performance as we
call these clients to discuss their go forward strategy. . . . * * * As
you may be aware, the 60-day anniversary of your clients participation
in the Strategic Investment Fund is November 22nd. As a reminder
for you and your client, we have summarized certain procedures that
may be of interest.) .......................................................................................... 503
32. Generating Capital Losses, A Presentation for , KPMG Peat
Marwick LLP, , 1996 ........................................................................... 505
33. KPMG Memorandum, June 1998, re: June 11 OPIS Conference Call
(Use of Nondisclosure Agreements and Outside Advisors) ........................... 517
34. Email, July 1999, re: BLIPSEconomic Substance Issue (Gentlemen,
we have completed our review of the BLIPS loan documents. In general,
these documents indicate that the loan proceeds will be invested in very
safe investments (e.g., money market instruments). Thus it seems very
unlikely that the rate of return on the investments purchased with the
loan proceeds will equal or exceed the interest charged on the loan
and the fees incurred by the borrower to secure the loan. * * * Before
any fees are considered, the client would have to generate a 240% annual
rate of return on the $2.5 million foreign currencies investment in order
to break even. If fees are considered, the necessary rate of return to
break even will be even greater.) .................................................................... 521
35. KPMG email, May 2000, re: Brown & Wood BLIPS Opinion letters
(As we discussed, the B&W opinion letters touch all the necessary bases.
The fact and representation sections are almost identical to the ones
in our Opinion and many analysis sections are exact copies of our Opin-
ion. Please let me know if you want further details about the non-
critical typos.) ................................................................................................ 522
36. KPMG email, July 1999, re: brown&wood (If you have a KPMG opinion,
you should also have a B&W opinion. We do ours and they use it
as a factual template for their opinion, usually within 48 hours.) .............. 524
37. Internal Revenue Bulletin No. 200036, September 5, 2000, Notice 2000
44, Tax avoidance using artificially high basisdescribing a BLIPS-
type transaction .............................................................................................. 525
38. KPMG Document, PFP Practice Reorganization, Innovative Strategies
Business PlanDRAFT (May 18, 2001) ....................................................... 528
39. KPMG email, May 1999, re: BLIPS Update (Larry [DeLap], I dont
like this product and would prefer not to be associated with it.) ................ 532
40. KPMG email, December 2000, re: Weekly Tax Solutions Call (Larry
[DeLap]Are you suggesting that we stop marketing the solution, or
that you just dont want a public discussion of the solution in light
of the IRS focus?) ............................................................................................ 533
41. KPMGs Personal Financial Planning Presentation, BLIPS AND
TRACT, Carol Warley, June 1999 (BLIPS Benefit: Avoid All Of The
Capital Gains And Ordinary Income Tax; Net Benefit To Client Ef-
fective Tax Rate Less After Tax Cost of Transaction of Approximately
5%) ................................................................................................................... 536
42. KPMG email, April 1999, re: BLIPS (The underlying tax planning is
such that the investor is likely to bail out after Stage 1; i.e., after
about 60 days.) ................................................................................................ 543
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43. KPMG email, March 2000, re: S-corp Product (No, we dont disclose
all risks in all engagement letters. * * * . . . I definately (sic) agree
on disclosing the risks upfront and would prefer to have the separate
memo that states the risks involved. . . . is there a way to make the
risk memo be covered under 7525?) ............................................................... 545
44. Sutherland Asbill & Brennan LLP correspondence, July 2002, re: Rep-
resentations of BLIPS client .......................................................................... 555
45. KPMG correspondence to Sutherland, Asbill & Brennan LLP, September
2002, re: Contract with KPMG for tax assessment for BLIPS client ......... 557
46. KPMG email, November 2002, re: Script (Attached is a list of law
firms that are handling FLIP/OPIS cases. * * * Attached is the script
. . . waiver language and list of attorneys to follow.) .................................. 560
47. KPMG email, March 2002, re: SC2 (Given the current state of affairs
relative to the IRS and accounting firms, I think we should not be
discussing SC2 on the Monday night call at this time.) .............................. 563
48. KPMG email, August 1999, re: BLIPS Engagement Letter (Attached
is the engagement letter approved by Larry [DeLap].) ................................. 566
49. KPMG email, March 2000, re: S-corp Product (1. This appears to be
little more than a old give stock to charity and then redeem it play
. . . * * * Our preference is that the client donate stock to a local
401(a), . . .) ..................................................................................................... 574
50. KPMG email, April 2000, re: S-Corporation Charitable Contribution
Strategy (SC2) (This is a relatively high risk strategy.) ............................... 584
51. KPMG email, August 2001, re: New Solutions-WNT [Washington Na-
tional Tax] (Beginning in December . . . The shareholders will most
likely want access to the cash (especially if we could get it to them
tax-free).) .......................................................................................................... 585
52. KPMG email, October 2001, re: SC2 Client (His ownership is so minute,
he is concerned about it being reduced any further by the charitable
contribution. We know that this reduction is only temporary, . . .) ........... 587
53. KPMG Document, Tax Innovation Center, Product Idea Submission
Form and KPMG Tax Solution Alert, April 24, 2000, S-Corporation
Charitable Contribution Strategy .................................................................. 589
54. KPMG document, undated, Draft PDC Talk Points 6/19, S-Corporation
Charitable Contribution Strategy (Cold call script.) .................................... 595
55. KPMG email, March 2001, re: Florida S corporation search (Request
to utilize database on tax return information to identify potential SC2
clients.) ............................................................................................................ 597
56. KPMG email, March 2001, re: South Florida SC2 Year End Push ........... 599
57. KPMG email, March 2001, re: SC2Client Base Expansion ..................... 601
58. KPMG email, December 2001, re: SC2 (. . . working on a back-end
solution to be approved by WNT [Washington National Tax] that will
provide S-corp shareholders additional basis in their stock which will
allow for the cash built-up inside of the S-corporation to be distributed
tax-free to the shareholders.) .......................................................................... 602
59. KPMG email, January 2002, re: SC2 (Shelly Nance is in Fort Wayne,
which is cold call central. How can she (or he) be involved in sending
out messages about SC2 if it is not being mass marketed.) ......................... 604
60. Permanent Subcommittee on Investigations correspondence to KPMG,
LLP, November 2003, re: November hearing testimony ............................. 609
61. KPMG Presentation excerpts: Tax Innovation Center Solution and Idea
DevelopmentYear-End Results, May 30, 2001; and Goal: Deposit 150
New Ideas in Tax Service Idea Bank ............................................................ 612
62. KPMG Presentation excerpts: Innovative Tax Solutions, July 19, 2001;
Tax Practice Update; and Tax Practice Growth Gross Revenue .................. 614
63. KPMG Presentation, S-Corporation Charitable Contribution Strategy
(SC2 Update), June 18, 2001, showing SC2 Revenues ................................ 617
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64. KPMG email, May 1999, re: BLIPSMore Likely Than Not? (. . . while
I am comfortable that WNT [Washington National Tax] did its job
reviewing and analyzing the technical issues associated with BLIPS,
based on the BLIPS meeting I attended on April 30 and May 1, I
am not comfortable issuing a more-likely-than-not opinion letter wrt (sic)
this product . . .) ............................................................................................ 621
65. KPMG email, May 1999, re: BLIPS (The real rubber meets the road
will happen when the transaction is sold to investors, what the investors
actual motive for investing the transaction is and how the transaction
actually unfolds. * * * My own recommendation is that we should be
paid a lot of money here for our opinion since the transaction is clearly
one that the IRS would review as falling squarely within the tax shelter
orbit.) ............................................................................................................... 623
66. KPMG email, August 1999, re: BLIPS involvement in the NEBDMs
(KPMGs fee is 1.25% (125 basis points) of the gain to be mitigated.
This fee is included as part of the 7% investment in strategy.) ................... 628
67. Deutsche Bank email, July 1999, re: Risk and Resources Committee
Paper (BLIPS SummaryThe 7.7% will cover market risks, transaction
costs, and DBSI fees.) ..................................................................................... 632
68. Email, September 1999, re: West (Larry [DeLap], just to clarify, even
if we have five or more investors in a single BLIPS transaction, you
dont think we need to register the transaction as a tax shelter. Is this
correct? * * * No, that is not correct, Mark Ely has concluded there
is a reasonable basis not to register.) ............................................................ 641
69. Deutsche Bank/Presidio Advisors, LLC Memorandum, April 1999, re:
BLIPS friction costs (On day 60, Investor exits partnership and unwinds
all trades in partnership.) .............................................................................. 644
70. Deutsche Bank New Product Committee Overview Memo: BLIPS Trans-
action (It is imperative that the transaction be wound up after 45
60 days and the loan repaid due to the fact that the HNW individual
will not receive his/her capital loss (or tax benefit) until the transaction
is wound up and the loan repaid.) ................................................................ 646
71. First Union (Wachovia) Capital Management Group Enhanced Invest-
ment Strategy Release, February 2, 1999 ...................................................... 651
72. KPMG Foreign Leveraged Investment Program, Issue and Hazard Sum-
mary (Taxpayer not sufficiently at risk under section 465) (preliminary
and final versions) .......................................................................................... 652
73. KPMG email, February 1999, re: BLIPS (. . . status of the BLIPS as
an OPIS replacement strategy. . . . I would think we can reasonably
anticipate approval in another month or so. * * * Given the market-
place potential of BLIPS, I think a month is far too long . . .) .............. 654
74. Email, February 1999, re: BLIPS Progress Report (I dont like this pres-
sure . . .) ......................................................................................................... 655
75. KPMG MEETING SUMMARY, February 1999, re: Determine if BLIPS
is viable ............................................................................................................ 656
76. Email, April 1999, re: BLIPS (I would not characterize my assessment
of the economic substances of the premium borrowing in the BLIPS
transaction as positive.) ............................................................................... 660
77. Email, April 1999, re: BLIPS Analysis ......................................................... 661
78. Email, May 1999, re: Who is the Borrower in the BLIPS transaction ........ 662
79. Email, August 1999, re: BLIPS DocumentsAcceptance of Recommended
Language ......................................................................................................... 663
80. Email, May 1999, re: BLIPS (According to Presidio, the probability of
making a profit from this strategy is remove (possible, but remote).) ......... 664
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81. KPMG email, May 1999, re: BLIPS (. . . my change in heart about
BLIPS was based on information Presidio disclosed to me at a meeting
on May 1. This information raised serious concerns in my mind about
the viability of the transaction, and indicated that WNT [Washington
National Tax] had not been given complete information about how the
transaction would be structured . . .) ........................................................... 665
82. Email, August 1999, re: BLIPS (. . . before engagement letters are signed
and revenue is collected, I feel it is important to again note that I
and several other WNT [Washington National Tax] partners remain
skeptical that the tax results . . . would actually be sustained by a
court if challenged by the IRS.) ..................................................................... 666
83. Email, January 2000, re: BLIPS 2000 (The PFP guys really need your
help on the BLIPS 2000 strategy. . . . so we can take this to market.) ...... 667
84. Email, March 2000, re: Blips I, Grandfathered Blips, and Blips 2000
(. . . I do not believe KPMG can reasonably issue a more-likely-than-
not opinion on the economic substance issues for the Blips . . .) ................ 668
85. KPMG Memoranda, February 1999, re: BLIPS ........................................... 669
86. KPMG Memoranda, March 2000, re: Talking points on significant tax
issues for BLIPS 2000 .................................................................................... 670
87. KPMG Memoranda, S Corporation Charitable Contribution Strategy,
Summary of Certain Risks (The opinion also much be based on all
pertinent facts and the law as it relates to those facts; must not be
based upon inaccurate legal or factual assumptions; and must not unrea-
sonably rely upon the representations, statements, findings, or agree-
ments of the taxpayer or any other person.) .................................................. 675
88. Email, May 1999, re: BLIPS (It was not until I heard conflicting infor-
mation that I questioned the original facts. In the future, I will question
everything Presidio and Randy Bickham represent to me.] ......................... 677
89. KPMG Tax Leadership, 2003; KPMG Tax Practice Organization, 2002,
2001 and 2000 ................................................................................................. 680
90. a. KPMG Tax Opinion Letter (Signed Final), December 1999. [Redacted
by the Permanent Subcommittee on Investigations] .............................. 684
b. Brown & Wood Tax Opinion Letter (Signed Final), December 1999.
[Redacted by the Permanent Subcommittee on Investigations] ............ 781
c. SEALED EXHIBIT: Unredacted copies of Exhibit No. 90a. and 90b
(above) ......................................................................................................... *
91. KPMG Memoranda, August 1998, re: Tax Products Practice (I was re-
sponsible for KPMGs position that we should not register OPIS as a
tax shelter and insisted that we make the business case with DPP.
This was of significant benefit in marketing the OPIS product and will
establish the direction with respect to KPMGs position on future tax
products.) ......................................................................................................... 857
92. KPMG email, September 1998, re: OPIS (These fees relate to approxi-
mately $1.2 billion in notional losses for approximately 25 clients.) .......... 865
93. Email, June 1998, re: OPIS (Not only will this unduely (sic) harm
our ability to keep the product confidential, it will DESTROY any chance
the client may have to avoid the step transaction doctrine.) ........................ 866
Volume 2
94. a.ggg. Documents relating to FLIP/OPIS ................................................... 869
95. a.BBB. Documents relating to BLIPS ........................................................ 1240
96. a.ll. Documents relating to SC2 .................................................................. 1692
Volume 3
97. a.pp. Documents relating to development/marketing of tax products ..... 1951
98. a.ppp. Documents relating to registering, reporting and filing with In-
ternal Revenue Service .................................................................... 2225
XII
Page
99. Documents relating to investment advisory firms:
a.f. Quadra/Quellos ...................................................................................... 2473
g.t. Presido .................................................................................................... 2485
100. Documents relating to law firms:
a.u. Sidley Austin Brown & Wood .............................................................. 2540
v.gg. Sutherland Asbill & Brennan ............................................................ 2576
101. Quadra Capital Management, LP. facsimile, August 1996, attaching
Memorandum on UBS involvement in U.S. Capital Loss Generation
Scheme (the CLG Scheme) (As I mentioned, KPMG approached us
as to whether we could affect the security trades necessary to achieve
the desired tax results.) ................................................................................... 2607
102. Deutsche Bank Memorandum, July 1999, re: GCI Risk and Resources
CommitteeBLIPS Transaction .................................................................... 2612
103. Deutsche Bank email, July 1999, re: Risk & Resources Committee
PaperBLIPS and Comments on Blips Collateral and Credit Terms
(I would have thought you could still ensure that the issues are high-
lighted by ensuring that the papers are prepared, and all discussion
held, in a way which makes them legally privileged.) ................................. 2615
104. Deutsche Bank email, July 1999, re: Risk & Resources Committee
PaperBLIPS (Our approach is as follows: STRUCTURE: . . .
Priviledge (sic): This is not easy to achieve and therefore a more detailed
description of the tax issues is not advisable. REPUTATION RISK: . . .
we have been asked by the Tax Department not to create an audit
trail in respect of the Banks tax affaires.) .................................................... 2618
105. Deutsche Bank email, February 2002, re: Updated Presidio/KPMG
trades (I understand that we based our limitations on concerns regarding
reputational risk which were heightened, in part, on the proportion of
deals we have executed relative to the other banks. * * * . . . we would
like to lend an amount of money to Hypovereinsbank equal to the amount
of money Hypovereinsbank lends to the client.) ............................................ 2619
106. Deutsche Bank email, April 2002, re: US GROUP 1 Pres, attaching
Structured Transactions Group North America Presentation, November
15, 1999 ........................................................................................................... 2622
107. HVB Document, undated, re: Presidio (7% > fee (equity) paid by inves-
tor for tax sheltering) ...................................................................................... 2646
108. HVB email, September 1999, re: Presidio .................................................... 2647
109. Deutsche Bank email, April 1999, re: presidiow. revisions (. . . The
holding period/life of the LLC will typically be 45 to 60 days. At the
end of this time period, the LLC will unwind all transactions, repay
the loan par amount and premium amount. For tax and accounting
purposes, repaying the premium amount will count like a loss for
tax and accounting purposes.) ........................................................................ 2649
110. KPMG email, March 2000, re: Bank representation (The bank has
pushed back the loan again and said they simply will not represent
that the large premium loan is consistent with industry standards.) ......... 2657
111. HVB credit request for BLIPS transaction by Presidio personnel, Sep-
tember 1999. (HVB will earn a very attractive return if the deal runs
to term. If, however, the advances are prepaid within 60 days (and
there is a reasonable prospect that they will be), HVB will earn a return
of 2.84% p.a. on the average balance of funds advanced.) ........................... 2660
112. KPMG Memoranda, March 1998, re: OPIS (The attached went to the
entire working group. . . . I believe that the OPIS product (Son of
Flip) is a stripped down version of the LLC (partnership) structure.) ...... 2678
XIII
Page
113. Deutsche Bank email, October 1999, re: BLIPS (PKS reports that a
meeting with John Ross was held on August 3, 1999 in order to discuss
the BLIPS product. PKS represented PB Managements views on
reputational risk and client suitability. John Ross approved the product,
however insisted that any customer found to be in litigation be excluded
from the product, the product be limited to 25 customers and that a
low profile be kept on these transactions.) ..................................................... 2679
114. Deutsche Bank New Product Committee Overview Memo: BLIPS Trans-
action (11DB will have the right to approve/disapprove all trading
activity in the Company. This will allow DB to effectively force the
closure of the company and repayment of its loan to DB.) [Note: An
alternative version of this document was previously entered into the
Permanent Subcommittee on Investigations hearing record as Exhibit
No. 70.] ............................................................................................................ 2681
115. KPMG Minutes of Assurance/Tax Professional Practice Meeting, Sep-
tember 28, 1998 ............................................................................................... 2686
116. Brown & Wood email, December 1997, re: joint projects (This morning
my managing partner, Tom Smith, approved Brown & Wood LLP work-
ing with the newly conformed tax products group at KPMG on a joint
basis in which we would jointly develop and market tax products and
jointly share in the fees, as you and I have discussed.) ................................ 2691
117. KPMG email, September 1997, re: Flip Tax Opinion (ALSO, OUR DEAL
WITH BROWN AND WOOD IS THAT IF THERE NAME IS USED
IN SELLING THE STRATEGY, THEY WILL GET A FEE.) ..................... 2692
118. KPMG Memorandum, March 1998, re: B&W Meeting (What should be
the profit-split between KPMG, B&W and the tax products group/
implementor for jointly-developed products?) ............................................... 2693
119. KPMG Memorandum, December 1997, re: Business ModelBrown &
Wood Strategic Alliance .................................................................................. 2696
120. Brown & Wood email, December 1997, re: Confidential Matters (On
another point, as I have been mentioning with you, I do work for a
number of people who have potentially complementary tax advantaged
products. Let me state up front, I am not trying to push any of these
on KPMG, but it might be useful if you are trying to get a repitoire
of products jump started to talk to some or all of them. In addition,
each of them has a relationship with one or more financial institutions
who provide credit, derivatives trades, etc. necessary to execute the prod-
uct.) .................................................................................................................. 2699
121. KPMG email, May 2000, re: BLIPS7 percent (The breakout for a
typical deal is as follows: . . . Trading Loss 70 * * * Attached is Kerrys
breakout of the 7 percent. [Redacted] gets 30 bpts from the Mgt. Fee.
Is this detailed enough?) ................................................................................. 2701
122. KPMG email, September 1999, re: BLIPSmanaging deal flow (As you
know, we have until 10/15 at the latest to close loans and 10/22 to
activate the FX trading, etc. (the 60 day countdown).) ................................ 2702
123. HVB Memorandum, October 1999, re: Presidio Credit Request Dated
September 14, 1999 (To summarize the above, the increased limits will
now permit the full amount of our facility to be invested in EUR deposits
and do related forwards.) ............................................................................... 2703
124. HVB Document, Back-End Process ............................................................... 2705
125. HVB Document, Transaction Timeline (Exchange USD Amount to EUR
Amount * * * USD 181,300,000) .................................................................. 2711
126. PRESIDIO ADVISORY SERVICES, LLC Memorandum, April 2002, re:
Year 2000 Strategic Plan. (Over the past two years because of delays
in obtaining the requisite approvals to market the OPIS and BLIPS
products, we did not begin closing deals until September of 1998 and
1999, respectively. * * * Both Deutsche Bank and KPMG have requested
that we replace our existing BLIPS product with a new product in
2000.) ............................................................................................................... 2712
XIV
Page
127. KPMG/Presidio Advisors email, October 1999, re: Couple of quick ques-
tionsLiquidating distributions (Upon distribution (at the end of the
60 day period), can the client designate where the funds go?) ..................... 2719
128. Handwritten notes, March 1998, re: Brown & Wood (Confirm w/Presidio
that they will register.) ................................................................................... 2720
129. PRESIDIO ADVISORY SERVICES, LLC Memorandum, September
1999, re: BLIPS loan test case (Four special purpose, single member
Delaware LLC, owned by four trusts: D. Amir Makov revocable trust
(1/3), JL capital trust (1/3), RP capital trust (1/6), pointe du Hoc
irrevocable trust (1/6)) ................................................................................... 2721
130. KPMG/Presidio Advisors email, December 1998, re: BLIPS meeting (Sec-
ond, the tax analyses and opinion writing needs to go into high gear.) ..... 2722
131. KPMG/Presidio Advisors/Brown & Wood email, December 1998, re:
BLIPS meeting (I spoke with R.J. this morning about a tax-focused
meeting next week. As a first step before scheduling a meeting, we
thought that we should first draft the base of an opinion letter in an
outline format which will be circulated for comment before getting every-
one together for a all-hands meeting. We are currently working on
the document and expect to circulate it next week.) ...................................... 2723
132. KPMG email, February 2000, re: Brown & Wood opinion letterBLIPS
(Jeff Eischeid has promised the Brown & Wood opinion template ready
in two weeks and we need your analysis.) ..................................................... 2724
133. KPMG email, January 2001, re: blips (Were still working with Moore
& Van Allen. Theyve declined to write a concurring opiniontheir firm
doesnt write such opinions as a matter of policy. They are considering,
this week, whether they will write [redacted] a MLTN [More Likely
than Not] penalty opinion.) ............................................................................ 2726
134. IRS Form 8264, Application for Registration of a Tax Shelter, QA Invest-
ments, LLC registration of FLIP ................................................................... 2727
135. KPMG/Quadra Fax and Memoranda, October 1997, re: Registration of
FLIP ................................................................................................................. 2729
136. Deutsche Bank email, July 1999, re: hi bill..presidio (i informed him
that you are point man on the deal and that all comments should
go through you) ............................................................................................... 2734
137. KPMG email and Memorandum, July 1997, re: Revised Memorandum
((I) KPMGs Tax Advantaged Transaction Practice; (II) Presidios Rela-
tionship with KPMG; (III) Transition Issues.) .............................................. 2735
138. HVB Document, August 2000, PresidioPlafond (Investors have, so far,
chosen to liquidate before the second (180 day) phase. ie after 60 days.) ... 2745
139. a.t. Documents relating to Ernst & Young ................................................ 2746
140. a.o. Documents relating to PriceWaterhouseCoopers ............................... 2803
141. a.k. Documents relating to First Union ..................................................... 2848
142. a. WNT Solutions by Primary Functional GroupFYI 20012002, No-
vember 26, 2002, reprinting first three pages of document (other
pages sealed, see Exhibit 139b.) ................................................................ 2871
b. SEALED EXHIBIT: WNT Solutions by Primary Functional Group
FYI 20012002, dated November 26, 2002 .............................................. *
143. SEALED EXHIBIT: StrateconWest email, December 2001, re:
StrateconWest/FSG Solution (Please find attached the latest and greatest
list of strategies for StrateconWest and FSG) ............................................... *
144. SEALED EXHIBIT: Correspondence between Brown & Wood LLP and
Presidio Advisors LLC, dated October 1998 and February 1999, regard-
ing billing and document preparation for tax opinion ................................. *
145. Organizational Chart, KPMG Tax Practice Organization, produced by
KPMG LLP in response to request made by Senator Levin at the No-
vember 18, 2003, hearing ............................................................................... 2874
XV
Page
146. Statement for the Hearing Record of Reuven S. Avi-Yonah, Irwin I.
Cohn Professor of Law and Director of the International Tax Master
of Law Program at the University of Michigan Law School ....................... 2875
147. a.b. Supplemental questions and answers for the record of KPMG.
[Note: Exhibit 147a has been redacted, full document has been
made a SEALED EXHIBIT.] ............................................................... 2878
148. Supplemental questions and answers for the record of Deutsche Bank .... 2939
149. Supplemental questions and answers for the record of HVB America,
Inc. ................................................................................................................... 2949
150. Supplemental questions and answers for the record of Quellos Group,
LLC .................................................................................................................. 2982
151. Supplemental questions and answers for the record of Sutherland Asbill
& Brennan LLP [Note: Submission has been redacted, full document
has been made a SEALED EXHIBIT.] ......................................................... 2984
152. Supplemental questions and answers for the record of Sidley Austin
Brown & Wood ................................................................................................ 2999
153. Statement for the Record and supplemental questions and answers for
the record of the Los Angeles Department of Fire & Police Pensions
System ............................................................................................................. 3016
154. Supplemental questions and answers for the record of the Internal Rev-
enue Service .................................................................................................... 3025
Volume 4
155. Documents relating to Footnotes found in U.S. Tax Shelter Industry:
The Role of Accountants, Lawyers, and Financial ProfessionalsFour
KPMG Case Studies: FLIP, OPIS, BLIPS, and SC2, a Report prepared
by the Minority Staff of the Permanent Subcommittee on Investigations
in conjunction with the Subcommittee hearings held November 18 and
20, 2003: [Note: Footnotes not listed are explanative, reference Sub-
committee interviews for which records are not available to the public,
or reference a widely available public document.]
Footnote No. 1, SEALED EXHIBIT ............................................................ *
Footnote No. 3, See Hearing Exhibit No. 38 (above) .................................. 528
Footnote No. 4, See Hearing Exhibit No. 16 (above) .................................. 453
Footnote No. 10, See Attachments (2) .................................................. 3027, 3036
Footnote No. 11, See Attachment ................................................................. 3045
Footnote Nos. 1516, See Hearing Exhibit No. 106 (above) ...................... 2622
Footnote No. 47, See Hearing Exhibit No. 62 (above) ................................ 614
Footnote No. 55, See Footnote No. 52 (above) ............................................. 587
Footnote No. 56, SEALED EXHIBIT .......................................................... *
Footnote Nos. 5859, See Footnote No. 57 (above) ..................................... 601
Footnote No. 70, See Footnote 69 (above) .................................................... 644
XVI
Page
155. Documents relating to Footnotes found in U.S. Tax Shelter Industry
Continued
Footnote Nos. 7374, See Footnote No. 69 (above) ..................................... 644
Footnote Nos. 7677, 7981, See Footnote No. 52 (above) ......................... 587
Footnote No. 84, See Attachment, Footnote No. 52 and Hearing Exhibit
Nos. 96ff, 96hh, and 96kk (above) ............................................ 3375, 587, 1692
Footnote No. 88, See Hearing Exhibit Nos. 73 and 85 (above) .............. 654, 669
Footnote Nos. 9293, See Hearing Exhibit No. 64 (above) ........................ 621
Footnote No. 94, See Hearing Exhibit Nos. 64, and 7679
(above) ............................................................................................. 621, 660663
Footnote Nos. 9596, See Hearing Exhibit No. 65 (above) ........................ 623
Footnote No. 99, See Attachment and Hearing Exhibit No. 65
(above) ................................................................................................... 3469, 623
Footnote No. 100, See Hearing Exhibit No. 65 (above) .............................. 623
Footnote No. 103, See Attachment ............................................................... 3472
Footnote Nos. 108109, See Hearing Exhibit No. 13 (above) .................... 450
Footnote No. 111, See Hearing Exhibit Nos. 84 and 86 (above) ............ 668, 670
Footnote No. 125, See Attachments (2) and Hearing Exhibit No. 49
(above) ................................................................................................... 3495, 574
(above) ................................................................................................... 3506, 574
Footnote Nos. 128129, See Footnote No. 52 (above) ................................. 587
(above) ................................................................................................... 3517, 595
XVII
Page
Continued
Footnote Nos. 145148, See Footnote No. 144 (above) ............................... 3530
Footnote No. 149, See Attachment (Partial document reprinted, full
document SEALED EXHIBIT) ................................................................. 3557
Footnote No. 154, See Attachments (2) ........................................................ 3575
Footnote No. 155, See Footnote No. 135 (above) ......................................... 2729
Footnote No. 157, See Attachments (3), Footnote No. 156 and Hearing
Exhibit No. 56 (above) ............................................................... 3581, 3579, 599
Footnote No. 168, See Attachment, Footnote No. 156 and Hearing Ex-
hibit Nos. 21 and 139m (above)...................................... 3606, 3579, 464, 2746
Footnote Nos. 169 and 171, See Hearing Exhibit No. 21 (above) .............. 464
Footnote No. 180, See Footnote No. 57 (above) ........................................... 3244
Footnote Nos. 184185, See Footnote No. 57 (above) ................................. 3244
Footnote Nos. 187188, See Footnote 186 (above) ...................................... 3621
Footnote No. 189, See Footnote No. 56 (above) SEALED EXHIBIT ......... *
(above) ................................................................................................... 3623, 528
XVIII
Page
Continued
Footnote No. 200, See Hearing Exhibit No. 137 (above) ............................ 2735
Footnote No. 203, See Attachment and Hearing Exhibit No. 65 ......... 3632, 623
(above) ................................................................................................... 3635, 452
Footnote No. 228, See Footnote No. 223 ...................................................... 3635
Footnote No. 230, See Hearing Exhibit No. 105 (above) ........................... 2619
Footnote No. 231, See Footnote Nos. 157 and 163 (above) ................. 3581, 3596
Footnote No. 238, See Footnote No. 117 ...................................................... 3475
Footnote No. 239, See Attachments (2) and Hearing Exhibit Nos. 111
and 129 (above); two addition items for this footnote are SEALED
EXHIBITS ................................................................................ 3660, 2660, 2721
(above) ................................................................................................... 3665, 646
Footnote No. 241, See Footnote No. 235 and Hearing Exhibit No. 138
(above) ................................................................................................. 3644, 2745
Footnote No. 242, See Hearing Exhibit Nos. 103 and 104
(above) ................................................................................................. 2615, 2618
Footnote Nos. 245246, See Hearing Exhibit No. 113 (above) .................. 2679
Footnote No. 251, See Footnote No. 84 ....................................................... 3375
(above) ................................................................................................. 3671, 2622
XIX
Page
Continued
Footnote No. 265, See Attachment, Footnote No. 244 and Hearing Ex-
hibit Nos. 70 and 108 (above) ......................................... 3679, 3668, 646, 2647
Footnote No. 266, See Attachments (2) (One document partially re-
printed, full document is (SEALED EXHIBIT) ....................................... 3681
Footnote No. 271, See Footnote No. 237 (above) (Found in the files
of the Subcommittee) ................................................................................ *
Footnote No. 281, See Footnote No. 117 and Hearing Exhibit No. 112
(above) ................................................................................................. 3475, 2678
Footnote No. 282, See Hearing Exhibit Nos. 64, 69 and 81
(above)............................................................................................. 621, 644, 665
Footnote No. 284. See Attachment .............................................................. 3714
Footnote No. 286, See Attachment (Four additional items for this foot-
note are SEALED EXHIBITS) ................................................................. 3718
Footnote No. 296, See Footnote No. 117 and Hearing Exhibit Nos.
42 and 112 (above)..................................................................... 3475, 543, 2678
XX
Page
Continued
Footnote No. 324, See Attachment and Footnote No. 320 .................. 3801, 3779
Footnote No. 328, See Attachment ............................................................. 3813
Footnote No. 329, See Attachments (2) ...................................................... 3814
Footnote No. 330, See Footnote No. 329 (above) ....................................... 3814
Footnote No. 337, See Hearing Exhibit No. 128 (above) .......................... 2720
Footnote Nos. 344 and 346, See Hearing Exhibit No. 28 (above) ............ 496
Footnote Nos. 349350, See Footnote No. 163 (above) ............................. 3596
Footnote No. 359, See Attachment and Footnote No. 203 (above) ........... 3840
(above) ................................................................................................... 3842, 602
Footnote No. 373, See Attachments (2) and Footnote Nos. 154 and
203 (above) ............................................................................... 3850, 3575, 3632
Footnote Nos. 379382, See Hearing Exhibit No. 115 (above) ................ 2686
XXI
Page
Continued
(above) ................................................................................................... 3853, 560
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Senate Hearing, 108TH Congress - U.S. Tax Shelter Industry: The Role of Accountants, Lawyers, and Financial Professionals

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Senate Hearing, 108TH Congress - U.S. Tax Shelter Industry: The Role of Accountants, Lawyers, and Financial Professionals

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S. Hrg.

U.S. TAX SHELTER INDUSTRY: THE ROLE OF

PERMANENT SUBCOMMITTEE ON INVESTIGATIONS

NOVEMBER 18 AND 20, 2003

Printed for the use of the Committee on Governmental Affairs

U.S. TAX SHELTER INDUSTRY: THE ROLE OF

PERMANENT SUBCOMMITTEE ON INVESTIGATIONS

NOVEMBER 18 AND 20, 2003

Printed for the use of the Committee on Governmental Affairs

For sale by the Superintendent of Documents, U.S. Government Printing Office

MICHAEL D. BOPP, Staff Director and Chief Counsel

PERMANENT SUBCOMMITTEE ON INVESTIGATIONS

RAYMOND V. SHEPHERD, III, Staff Director and Chief Counsel

Opening statements: Page

TUESDAY, NOVEMBER 18, 2003

THURSDAY, NOVEMBER 20, 2003

I. INTRODUCTION ............................................................................................... 145

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