A KPMG tax shelter that the Internal Revenue Service last year declared abusive had attracted prominent U.S. companies including Delta Air Lines and Whirlpool Corp., The Wall Street Journal reported on Wednesday.
Previously undisclosed internal records from KPMG list a host of big companies that agreed to buy the shelter, which the IRS has said generated at least $1.7 billion in tax savings for more than two dozen companies, the newspaper said.
KPMG sold the shelter, known as "contested liability acceleration strategy," or CLAS, to help companies accelerate the timing of tax deductions for settlements of lawsuits or other claims, the Journal said. Some former KPMG tax partners estimate the shelter generated $20 million in fees for the firm, the newspaper said.
Delta Air Lines, Whirlpool, Clear Channel Communications Inc., WorldCom Inc., Tenet Healthcare Corp. and the U.S. units of AstraZeneca Plc and Fresenius Medical Care AG all used the shelter, the Journal said.
The KPMG records, covering the years 1999 through 2001, show Qwest Communications International Inc., Washington Mutual Inc., Global Crossing Ltd., Lennar Corp. and the U.S. units of Cemex SA and Siemens AG signed agreements to buy the shelter, but those companies would not say whether they implemented it, the Journal said.
There is no indication of any criminal probe into the corporate users of CLAS, the Journal said.
A Delta spokeswoman was quoted by the Journal as saying the company "can't comment on tax periods still under audit." A person familiar with Delta's transaction said the airline unwound CLAS shortly after implementing it in 2000, the newspaper said.
Emily Wharton, a Delta spokeswoman contacted by Reuters, declined further comment.
Neither KPMG nor the other companies cited in the report was immediately available for comment to Reuters.