The Hindu Business Line : Are the Big Three padding expenses?

THREE of the Big Four accountancy firms have been named in a US lawsuit alleging that they overcharged clients millions of dollars in travel expenses.

PricewaterhouseCoopers, KPMG and Ernst & Young were named in the suit filed in Arkansas by shopping-mall operator Warmack-Muskogee Limited Partnership, the Wall Street Journal reported. The US Justice Department is reportedly investigating PwC's billing practices as a result of the suit. The suit alleges that the firms enjoy bulk travel discounts from airlines, hotel chains and car rental operators, but that they systematically billed clients for the full price of these amount expenses. The amounts they get back from travel companies can be as high as 40 per cent.

The Warmack-Musckogee suit further alleged that the accused firms colluded with each other to negotiate better terms from travel operators, the details of which they agreed to keep from their clients.

The defendants denied the allegations. No date has yet been set for the case to go to trial.

Bit tax, RIP?

THE House of Representatives has passed the Internet Tax Non-Discrimination Act, the Bill that imposes a permanent ban on taxes on Internet services. The current moratorium, set to expire on November 1, 2003, was a temporary fix installed two years ago, providing legislators with time to debate the issues of the permanent moratorium.

The Bill amends the Internet Tax Freedom Act (IFTA), to provide for a permanent moratorium on state and local taxes on all Internet access services without regard to speed, technology, or provider. Both broadband and dial-up services are covered by the Bill.

The Bill now goes to the full Senate where it has already met with approval from the Senate Commerce Committee. The US President, Mr George W. Bush, has indicated that he will sign the legislation.

Several states assess Internet access taxes in various forms. Some tax Internet services that are bundled with telephone services. Other states have been able to sidestep the Internet tax moratorium because they had laws in place allowing taxation of Internet services before the first moratorium was passed in 1998.

All of these states will be required to repeal their Internet taxes should the new permanent moratorium become law.

Many people confuse the Internet access tax moratorium with legislation affecting sales tax on Internet purchases. The two taxes are not the same, and this legislation does not affect sales tax on purchases.

(Source: AccountingWEB)

Article E-Mail :: Comment :: Syndication

Stories in this Section
Dousing hot money

It's all in the family

A bouncer for Bhogle

Rigour of the new regime

No rap if wrapped well

Are the Big Three padding expenses?

Hurdle to disinvestment

Cancun: End of the road for WTO?

Clarification needed on investment by OCBs

To study inflation, call in the maids and nannies