Taking advice from the big four can prove costly.  Not only can you lose prior year’s income but be fired and even face jail time.

The recent scandal at Sprint highlights the risk executives face when they accept "too good to be true" income from their companies.

It has been years since two top executives used tax shelters to avoid taxes on $ 100 million of stock options. The Wall Street Journal sums up the story well with its headline “Troubling Options.  Inside the Tough Call at Sprint.  Fire the Auditors or the Executives."

Imagine: you are a successful executive at one of the leading telecom companies.  You have hired one of the Big 4 audit firms to provide you with guidance and credibility.  You trust them they are the gate keepers between your company and illegal accounting and tax mistakes. 

As one of your benefits your company encourages you to use these auditors as personal tax advisors, so you do.  The folks at Sprint did just that and now they are paying the price.  The board wants to fire them and the IRS wants their money.

But the news gets worse.  There is no cash to pay the taxes.  The profit on the options was re-invested in Sprint stock, which has lost significant value.  And to top it off ---- is battling lymphoma.

What can you do to prevent this from happening to you?

• Get an independent assessment of your past and current executive compensation and loan programs. Find out the new rules under the S/O act.   ( Link to SEC site) 

• Find out if the board has completed their assessment of the audit firms as part of the new S/O process and review their findings.

• Pay heed to the old sayings “Nothing in life is free", If it sounds too good to be true it is, pay now or pay more later.

The Blue Sage Group to find out how you can protect your income in the future.  Contact Us now to see how we can help.