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Whistleblower lawyer says company dodged taxes

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in Employment Law

An attorney who once worked for Valley Forge, Pa.-based investment firm Vanguard claims the company charges its affiliates artificially low management fees, which illegally reduces its own tax burden.

David Danon took his claims to both the IRS and the Securities and Exchange Commission and asked them to launch reviews of Vanguard’s practices. Vanguard is the nation’s largest mutual fund company.

Danon also retained a tax attorney to review the figures. That analysis concluded that Vanguard owes approximately $34.6 billion dollars in back taxes. Also alleged: That Vanguard illegally failed to pay taxes on a $1.5 billion reserve fund.

After contacting federal enforcement agencies, Danon filed a complaint in state court in New York. Vanguard has moved to have that lawsuit dismissed, claiming Danon used information protected by attorney-client privilege to prepare the filing.

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