Accounting trade magic: making billions disappear

Tuesday, February 18, 2003 at 1:00am

Talk about perfect timing. To give the millions of Americans who are taking up the dreaded yearly task of preparing their taxes just a little bit more aggravation, here comes the story of massive tax avoidance by Sprint CEO William Esrey and his right-hand man Ron LeMay. These two paid no taxes on $288 million in stock-option profits thanks to some highly imaginative tax shelters dreamed up by the accounting alchemists at Ernst & Young.

So how, exactly, does one make $288 million in taxable income disappear? It's a magic trick that requires a combination of accounting sleight-of-hand and legal mumbo-jumbo, as well as the willing compliance of a wide-array of accomplices

Filed under: City Voices