Sprint Corp. said Wednesday that Ronald LeMay, who is being audited for his personal use of tax shelters, has stepped down as president and chief operating officer of the No. 4 U.S. long-distance telephone company, effective immediately.

The Overland Park-based company said LeMay, who had been with the company for most of the past 17 years, has entered into a separation agreement with Sprint and will provide consulting services to the company for one year.

LeMay, who had once been seen as a successor to Sprint Chairman William Esrey, had been asked to leave the company over the tax shelter controversy, sources familiar with the situation previously said.

In mail sent to managers in February, Esrey said he was being audited by the U.S Internal Revenue Service over his personal use of tax shelters, and an adverse decision could wipe out his assets.

Sources have said LeMay also was being audited and faced the threat of tens of millions of dollars in back taxes, penalties and fines.

The tax shelters were set up by Ernst & Young, which also is Sprint’s independent auditor. The company plans to hire Ernst & Young again this year, pending shareholder approval, according to a recent filing with Securities and Exchange Commission.

The auditing firm previously said it stood by the tax advice and counsel it provided to Sprint executives.

In a prepared statement, Gary Forsee, Sprint’s chief executive, referring to LeMay’s consultancy position, said that his “counsel will assure a level of continuity during this period of management transition.”

Forsee has said his top priorities included filling a key management position leading the core long-distance operations, and building on the progress Sprint has made in cutting its debt and improving its cash position.

Sprint and other long-distance carriers have seen calling volumes drop as more and more customers have shifted to mobile phones and electronic mail.