Vanguard Whistleblower Could Get Billions In Tax Dodge Complaint

Discussion in 'Other Asset Classes' started by Redwing, 11th Jan, 2016.

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  1. Redwing

    Redwing Well-Known Member

    18th Jun, 2015
    What a Paradox, charge low fees for investors, get accused of dodging taxes as other companies fleece investors

    Vanguard Whistleblower Could Get Billions In Tax Dodge Complaint

    "If you are among the 20 million Americans saving for retirement through Vanguard, you may be in for an expensive shock. The nation’s largest mutual fund company is under fire for not taking more of your money. That sounds ridiculous, but based on arcane provisions of the endlessly complex U.S. tax code, the Pennsylvania-based company may soon be forced to pay a staggering amount of back taxes because of the famously low fees it charges to manage your nest egg.

    Two years ago, David Danon, a former Vanguard tax lawyer who is now a whistleblower no one would ever confuse with Erin Brockovich, filed formal complaints with the Internal Revenue Service and many state taxing agencies claiming that Vanguard’s low fees are an illegal tax dodge. He argues that Vanguard should have charged investors an extra $19.8 billion in investment fees this year alone and owes almost $35 billion in taxes, interest and penalties since 2007. Under a 2006 law, a tax whistleblower may collect 15 to 30 percent of what the IRS collects, which means Danon could be heading for a payday of up to $10 billion."

    Continues on link..

    Vanguard’s actions implied they weren't concerned. In 2014, Vanguard reduced fees on 90 of its funds, including 31 ETFs. In 2015, Vanguard reduced fees for 102 funds, including 28 ETFs. On December 22nd, the firm announced that it dropped fees again. Fees fell for 53 funds, including 21 ETFs.
    Perthguy likes this.
  2. jrc

    jrc Well-Known Member

    20th Jun, 2015
    Regional NSW
    Surely the argument should be that the non Vanguard funds are overcharging