KPMG and the Tory Party

[Topaz]

This can't be good news for the Tory Party about ministers meeting with senior staff of KPMG, who is in a lot of trouble with revenue Canada and the scams they were running. http://www.cbc.ca/news/business/cabinet-ministers-met-publicly-with-kpmg-while-firm-s-tax-sham-under-cra-probe-1.3234876

[PIK]

Have they been convicted of anything or is this just more of your spam.

[SpankyMcFarland]

Have they been convicted of anything or is this just more of your spam.

A lot of unsavoury individuals have never been convicted of anything. You'll be telling us their Isle of Man tax doodles are competely legal next. Outfits like KPMG are electorally bad news. We all know how they serve the ultra-rich across the world. And please, I know about Paul Martin, the Bronfmans and other Lib sins. These characters are thoroughly bipartisan in their shenanigans.

Edited September 22, 2015 by SpankyMcFarland

[cybercoma]

Have they been convicted of anything or is this just more of your spam.

Well, the Conservative Party has been convicted in the past and you didn't care about that, so......

[SpankyMcFarland]

'KPMG has been fighting a February 2013 court order to hand over the list of wealthy clients to the CRA for more than two years.

Yet in the 31 months since the judicial authorization, neither the federal government nor KPMG has requested a court date for the accounting firm's appeal.'

Why is the govt not moving on this case?

[Go.Leafs]

This is interesting to be sure. Where is Christy Blatchford and Kevin Donovan when you need them?

[SpankyMcFarland]

This is a big story, a bipartisan, maybe soon to be tripartisan, story of how rich people can stack the deck in their favour.

[kimmy]

Why would politicians want to be cozy with a company this slimy?

-k

[ToadBrother]

Why would politicians want to be cozy with a company this slimy?

-k

Is this a rhetorical question?

Crikeys, the Liberals in the 50s and 60s in Montreal were notorious for their association with the Mafia.

Politics and sleaze are like peanut butter and jam.

[Accountability Now]

Why would politicians want to be cozy with a company this slimy?

-k

KPMG is one of the big four accounting firms in Canada and they sponsor many events like the Canada2020 event which Justin Trudeau spoke at in June.

The fact is that the the Tories did not got to KPMG event, they went to a Vancouver Board of Trade event which happened to be sponsored by KPMG.

Of course, I would also like to remind you this matter is currently in the courts and I thought in this country it was innocent until proven guilty. Or is that only when it fits your narrative?

[kimmy]

Is this a rhetorical question?

Crikeys, the Liberals in the 50s and 60s in Montreal were notorious for their association with the Mafia.

Politics and sleaze are like peanut butter and jam.

Well, *theoretically* the rules in place should eliminate the ability of wealthy corporations to coax favors from political parties using donations, right?

In theory, we've taken away the motive for politicians to get cozy with these guys. But how does it actually work in the real world?

KPMG is one of the big four accounting firms in Canada and they sponsor many events like the Canada2020 event which Justin Trudeau spoke at in June.

The fact is that the the Tories did not got to KPMG event, they went to a Vancouver Board of Trade event which happened to be sponsored by KPMG.

Of course, I would also like to remind you this matter is currently in the courts and I thought in this country it was innocent until proven guilty. Or is that only when it fits your narrative?

KPMG may not have been proven guilty in this current scam, yet. But they've been proven guilty in prior scams. This is, after all, the company that invented the "Son of B.O.S.S." scam that a number of companies used (including Marriott when Mitt Romney was on the board of directors there).

In IR-2005-83, Aug. 29, 2005, the IRS reported that in the largest criminal tax case ever filed, KPMG admitted that it engaged in a fraud that generated at least $11 billion in phony tax losses which, according to court papers, cost the United States at least $2.5 billion in evaded taxes. In addition to KPMG’s former deputy chairman, the individuals indicted include two former heads of KPMG’s tax practice and a former tax partner in the New York, New York office of a prominent national law firm.^[7]

And when they do get caught, they'll just move on and invent a new scam.

So again, why would politicians want to hang out with scum like this?

-k

[SpankyMcFarland]

KPMG is one of the big four accounting firms in Canada and they sponsor many events like the Canada2020 event which Justin Trudeau spoke at in June.

The fact is that the the Tories did not got to KPMG event, they went to a Vancouver Board of Trade event which happened to be sponsored by KPMG.

Of course, I would also like to remind you this matter is currently in the courts and I thought in this country it was innocent until proven guilty. Or is that only when it fits your narrative?

Your username seems a tad in favour of the bean counters at the heart of this story. How long are both sides going to park this case in the courts - until we mugs forget about it? Or perhaps until our govt negotiates a nice little out-of-court settlement with these gentlemen?

http://www.cbc.ca/news/business/federal-probe-of-kpmg-tax-sham-stalled-in-court-1.3210113

Anyway, it's not a criminal trial, so nobody will be found guilty or face jail time or anything uncivilized like that.

Edited September 24, 2015 by SpankyMcFarland

[Accountability Now]

KPMG may not have been proven guilty in this current scam, yet. But they've been proven guilty in prior scams. This is, after all, the company that invented the "Son of B.O.S.S." scam that a number of companies used (including Marriott when Mitt Romney was on the board of directors there).

KPMG Canada is technically not the same as KPMG US where you are citing your example from. However it does hold water in that KPMG is a part of the Big Four which is not only in Canada but in many other Western countries. Here is a good article citing cases about Deloitte, PWC, Ernst and Young and KPMG and how they all do these scams in some shape or form. http://www.theguardian.com/commentisfree/2012/dec/10/end-tax-scams-by-hitting-big-four

The reality is that tax law is not viewed as absolute by the CRA or these accountants. There is a grey area where if you can explain your reasoning then you are ok which is how these 'scams' arise. Most of these scams would actually continue to work if the companies didn't get so greedy and paid something but as you see some of these guys don't pay anything.

And when they do get caught, they'll just move on and invent a new scam.

So again, why would politicians want to hang out with scum like this?

These companies represent the VAST majority of large business in Canada. The government/politicians have no other way but to rub shoulders with these guys as there is entirely way to much business/events/information sharing that happens with them.

Of course the first thing that an accountant will tell you when they present their tax plan (whether its a scam or not) is that ultimately the business signs off on it and the accounting firm is not responsible for the decision. The accounting firm will present various options and its up to the business to decide which plan they want to go with. Now I'm with you, a reputable firm wouldn't even offer such a plan but the competitive nature of corporate accounting pushes the limits which is why they do.

So to answer your question, hanging out with this scum is part of the job. Its how they stay on the inside. The CRA is constantly adjusting and trying to crack down on scams but they also need to preserve a relationship that will allow business to continue. If they just constantly put the hammer down then our economy would shrink and we would have a new cry of outrage.

[Accountability Now]

Your username seems a tad in favour of the bean counters at the heart of this story.

I am not an accountant nor do I have many (if any) accounting skills. As a business owner I get drawn into the accounting world once or twice a year for year end financials but that's about it.

How long are both sides going to park this case in the courts - until we mugs forget about it? Or perhaps until our govt negotiates a nice little out-of-court settlement with these gentlemen?

The CRA usually picks its spots where it can do the most damage. So I'm guessing this delay is due to information gather and/or waiting for that spot to open up. As I said in an earlier post, the legality of the matter is that the final decision to go with a taxation plan lies with the business. As such there may be some issues with going after or actually prosecuting KPMG on this. I certainly don't think its a slam dunk case.

There have been cases where large accounting firms have paid the ultimate price (ie Arthur Anderson due to the Enron case). So there may be hope here.

[SpankyMcFarland]

I am not an accountant nor do I have many (if any) accounting skills. As a business owner I get drawn into the accounting world once or twice a year for year end financials but that's about it.

The CRA usually picks its spots where it can do the most damage. So I'm guessing this delay is due to information gather and/or waiting for that spot to open up. As I said in an earlier post, the legality of the matter is that the final decision to go with a taxation plan lies with the business. As such there may be some issues with going after or actually prosecuting KPMG on this. I certainly don't think its a slam dunk case.

There have been cases where large accounting firms have paid the ultimate price (ie Arthur Anderson due to the Enron case). So there may be hope here.

My remark on the name was an attempt at humour. I should have put a smiley in there.

Seriously, though, the delay taken by govt should have been minimal given the circumstances of the case and the cynicism it encourages among ordinary taxpayers. Governments have to be tougher and swifter in these matters if they are to retain any credibility. Nothing is more annoying than being told that some extraordinarily elaborate scheme is completely legal when its sole intent is to get round the law and flout its spirit.

CRA has to take a longer view on these cases. The significant cost in pursuing them should be seen as having deterrent value against similar future attempts at legal subversion.

Edited September 24, 2015 by SpankyMcFarland

[Accountability Now]

Seriously, though, the delay taken by govt should have been minimal given the circumstances of the case and the cynicism it encourages among ordinary taxpayers. Governments have to be tougher and swifter in these matters if they are to retain any credibility.

I'll ask you this question....do you think you have seen or even have access to ALL the evidence? I assume you are making your claim based on the CBC news stories and the fact that where there's smoke there's fire. A company like KPMG will not just roll over based on some circumstantial evidence. The government needs to make a calculated move in order to strike properly. Such moves take time.

Nothing is more annoying than being told that some extraordinarily elaborate scheme is completely legal when its sole intent is to get round the law and flout its spirit.

I hear ya. I often get told about other 'tax plans' (aka schemes) that are completely legal today however similar plans of the past have been shut down. I guess I'm one of those odd ducks in that I feel a moral obligation to pay tax. I am all for trying to minimize that tax in honest and logical methods but some of these tax plans out there are truly intent on just screwing the government which I will never agree with.

CRA has to take a longer view on these cases. The significant cost in pursuing them should be seen as having deterrent value against similar future attempts at legal subversion.

I sat next to a CRA auditor on a plane ride a few years back and we talked about some of these tax evaders. His comment was that the CRA is so burdened right now with guys who are deliberately breaking the tax laws that they don't even have time to chase guys who are at least walking the grey line. Not sure if that was entirely true however I have been told by many accountants that if you can back your reasoning enough to make CRA think twice then you have a strong enough case as they would rather spend time on more obvious cases.

That said, these cases may have a carrot that makes it worthwhile considering the money involved.

[SpankyMcFarland]

I just hate to see people 'getting away' with things because it's too much trouble to go after them. For me, that's just wrong.

And, needless to say, these problems were with us long before Mr. Harper came along.

[PIK]

SNC-Lavalin anyone.

[Accountability Now]

I just hate to see people 'getting away' with things because it's too much trouble to go after them. For me, that's just wrong.

I agree but sadly that is our current conditions. I should say it might have changed since I spoke to that guy but it doesn't seem that way.

[kimmy]

KPMG Canada is technically not the same as KPMG US where you are citing your example from. However it does hold water in that KPMG is a part of the Big Four which is not only in Canada but in many other Western countries. Here is a good article citing cases about Deloitte, PWC, Ernst and Young and KPMG and how they all do these scams in some shape or form. http://www.theguardian.com/commentisfree/2012/dec/10/end-tax-scams-by-hitting-big-four

Yeah, I read that article and many others like it some time ago when TimG and I were having a lengthy discussion on the topic of corporate tax avoidance/evasion. KPMG Canada might be a seperate entity from KPMG US or KPMG International in a legal sense, but their customers all want the same thing.

These companies represent the VAST majority of large business in Canada. The government/politicians have no other way but to rub shoulders with these guys as there is entirely way to much business/events/information sharing that happens with them.

Of course the first thing that an accountant will tell you when they present their tax plan (whether its a scam or not) is that ultimately the business signs off on it and the accounting firm is not responsible for the decision. The accounting firm will present various options and its up to the business to decide which plan they want to go with. Now I'm with you, a reputable firm wouldn't even offer such a plan but the competitive nature of corporate accounting pushes the limits which is why they do.

I completely agree that the corporations that buy into these scams bear some responsibility, but ultimately they are paying KPMG (or their competitors) for expertise that includes an understanding that these schemes are actually legal.

So to answer your question, hanging out with this scum is part of the job. Its how they stay on the inside. The CRA is constantly adjusting and trying to crack down on scams but they also need to preserve a relationship that will allow business to continue. If they just constantly put the hammer down then our economy would shrink and we would have a new cry of outrage.

The idea that the economy will sink if these highly profitable firms are forced to pay Canada's extremely competitive corporate tax rates is highly suspect (to put it as politely as possible).

Cybercoma has started a thread specific to the topic of whether less corporate tax means more jobs. (short answer: probably not.)

-k

[Accountability Now]

Yeah, I read that article and many others like it some time ago when TimG and I were having a lengthy discussion on the topic of corporate tax avoidance/evasion. KPMG Canada might be a seperate entity from KPMG US or KPMG International in a legal sense, but their customers all want the same thing.

My point wasn't to focus on the differences between the US and CDN entities but to say if we are going to look at both then all the major firms have lawsuits and suspicious which makes this not about KPMG per se but rather the system itself and having that change.

The idea that the economy will sink if these highly profitable firms are forced to pay Canada's extremely competitive corporate tax rates is highly suspect (to put it as politely as possible).

I agree.

Cybercoma has started a thread specific to the topic of whether less corporate tax means more jobs. (short answer: probably not.)

I was on that thread and I added a few points showing that the decrease in corporate taxes is a global issue and that Canada is competing with other countries in that respect. So we need to keep that in mind when establishing the rates. However, once the rates are established there is no reason the companies shouldn't pay the taxes that they are legally bound to. If they want to leave then leave but you can't stay here and not pay.

[SpankyMcFarland]

KPMG have been implicated in similar schemes in Britain and Ireland. It is what they and their fellow big firms do. The rich do pay a lot of tax but they also have unique abilities to bend the law in their favour.

[SpankyMcFarland]

I'm not sure what to make of this news story:

http://www.cbc.ca/news/business/harper-government-partnered-with-industry-group-fighting-cra-over-kpmg-case-1.3257994

At least, one suspects future governments will be more careful about being photographed with these people, especially when the sleazy stories of offshore shenanigans show no sign whatsoever of going away.