Professional services firms KPMG’s US arm has announced that it "deeply regrets" that it sold unlawful tax sheltering arrangements such as B...

Professional services firms KPMG’s US arm has announced that it "deeply regrets" that it sold unlawful tax sheltering arrangements such as Bond Linked Premium Structures and Foreign Leveraged Investment Programmes between 1996 and 2002.

These sales, which are subject to an ongoing US Department of Justice investigation, been estimated to have brought the firm around $150 million in revenue whilst depriving the US government of around $1.4 billion in lost receipts.

In a recent statement KPMG said, "It has been public knowledge that since February 2004, that the Department of Justice has been investigating certain tax services that were offered by the firm during 1996 – 2002. This is part of a larger tax shelter investigation into the role of accounting firms, law firms, large banks and taxpayers who participated in the development, promotion and implementation of tax shelters."

"KPMG takes full responsibility for the unlawful conduct by former KPMG partners during that period, and we deeply regret that it occurred."

The firm has stopped providing the services in question and has put in place a process to ensure that those responsible for wrongdoing have been separated from the firm. It has also made wide-ranging internal cultural and governance change to ensure that this does not happen again.

It is uncertain whether the US authorities intends to push ahead with a criminal prosecution that could end up reducing the “Big Four” accounting firms in the US to the “Big Three”.