Vanguard, Facing Whistle-Blower Cases, Agrees to Pay Texas Taxes
- Fund firm didn't charge itself enough for advising: ex-lawyer
- Claim of underpaid taxes also made to IRS, SEC and California
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Vanguard Group Inc. has reached an agreement to pay several million dollars in back taxes in Texas, the first known payout related to a whistle-blower’s accusation that the world’s biggest mutual-fund company underpaid its taxes by tens of billions of dollars.
The Texas action came after a former Vanguard tax lawyer alleged that the company provided services to its mutual funds at below the going price. Had the company charged its own funds at market rates, it would have brought in more income and paid more in taxes, the lawyer says. He’s made these allegations in claims filed with the Internal Revenue Service and the Securities and Exchange Commission, as well as with tax authorities in Texas and California.