Six tax lawyers from PwC’s Washington office walked to law firm Shaw Pittman, saying restrictions imposed on the accountancy firms’ work made staying with the firm unattractive. How could working for an audit firm possibly be unattractive?

The move highlights the difficulties that the large accountancy firms face in trying to retain tax work revenues following last year’s clampdown on the non-audit services they can offer audit clients.

Regulators and politicians became concerned in the wave of corporate scandal that the independence of audits was being jeopardised by accountancy firms gaining lucrative consultancy work at the same clients.

The Sarbanes-Oxley Act, last year’s sweeping corporate governance legislation, banned much of that extra work including the part of tax advocacy in which the six former PwC staff work.

Many other areas of tax work are not banned, however, with board audit committees left to decide what they can award without compromising independence.

Stephen Huttler, managing partner of Shaw Pittman, said large accountancy firms had been luring tax lawyers from law firms and now that trend was being reversed. “The chance of working with big audit clients was a pull and now that is greatly diminished,” he said. “This is the first step in the opposite direction.”

PwC’s tax practice in Washington has 250 staff and recently scored a success by luring Lindy Paull, former chief of staff of the Congressional joint committee on taxation.

However Bob Morris, co-managing partner of PwC’s national tax services, acknowledged that restrictions imposed by Sarbanes-Oxley had made it difficult for Mr Solomon’s team.

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