homesheltersuncovering schemesprospects for reform

kpmg exhibits - 16
This e-mail was sent by Jeffrey Eischeid, who was then the head of KPMG's Personal Financial Planning unit, which marketed many shelters. The e-mail, which specifically refers to the BLIPS shelter, confirms that cutting taxes was a "key objective" of the shelter. Eischeid writes, "Innovative Strategies is a portfolio of value-added products that are designed to mitigate an individual's income tax as well as estate and gift tax burdens." The e-mail also reveals that the shelter was priced based on a percentage of the client's tax savings. [Note: In January 2004, Eischeid was removed from his position at KPMG and placed on administrative leave.]

From: Eischeid, Jeffrey A

Sent: Wednesday, July 21,1999 6:10 AM

To: Comer, Michael S

Cc: Ammerman, Douglas K; Green, Douglas J

Subject: FW: National Accounts Database

The following is a draft "product pitch" similar to the one you forwarded me last month. Note that this product has received tentative DPP-Tax approval. It is still subject to Washington National Tax review of the underlying documentation to insure the documentation comports with various representations. That review is currently in process and should be completed some time this week or next week. To be conservative, you should probably wait for formal approval before distributing your email to National Account TSPs.

I'd like to talk to you about more specific targeting within the National Accounts list. This effort is going to be somewhat difficult given the breath of application of the BLIPS product.

Finally, I am not sure how to integrate the BLIPS product announcement with the broader PFP issue we discussed on the 14th. Specifically, if the priority of the TSPs is to enhance KPMG's relationships with the "C class", they should introduce their local PFP partner and the broad services that the PFP practice offers, e.g. tax retum preparation, estate planning, stock option planning, retirement planning, etc. Innovative Strategies (formerly CaTS) is an integral part of that broad practice and is something like the icing on the cake. If the notion of a broad PFP relationship doesn't sell in a particular situation, we can at least offer key executives an introduction to Innovative Strategies. Innovative Strategies is a portfolio of value-added products that are designed to mitigate an individual's income tax as well as estate and gift tax burdens. BLIPS is just one of the products in the Innovative Strategies portfolio.


exhibit 16
examine a facsimile of this document

************************ ACTION REQUIRED *********************


CRITERIA: Individuals with:

. significant (> $20 million) capital gain income, e.g., sale of company stock, or . significant (> $20 million) ordinary income, e.g., exercise of nonqualified options.

VALUE PROPOSITION: Reduce Federal and state tax liabilities by making tax advantaged investments in emerging markets currencies. Aside from trading profits, a key objective is for the tax loss associated with the investment structure to offset/shelter the taxpayer's other, unrelated, economic profits. This is a turnkey investment program that integrates the services of various parties including the investment advisor, legal/drafting, banking, and KPMG tax opinion. The all-in cost of the program, assuming a complete 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 taxpayer's 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.

CONTACT: Jeff Eischeid -Personal Financial Planning-Atlanta- [PHONE NUMBER DELETED]

----Original Message----

From: Comer, Michael S

Sent: Tuesday, July 20, 1999 10:12 AM

To: Eischeid, Jeffrey A

Subject: National Accounts Database

File: NA720.x1s


Attached is the current listing of National Accounts for the PFP analysis. It's not substantially different than the June 2 listing. Let me know if you need any other information.




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posted february 19, 2004

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