Enron, Qwest, MCI Denied Tax Refunds by Senate

WASHINGTON -- The U.S. Senate moved to block Enron Corp., MCI Inc. and Qwest Communications International Inc. from claiming tax refunds after making payments on billions of dollars they falsely said they earned, Bloomberg News reported Thursday.

The chamber, by unanimous vote, added the provision to a $441 billion economic growth plan. Senate Finance Committee Chairman Charles Grassley said companies shouldn't be able to reclaim taxes paid to create a façade of healthy earnings.

“The con men pay a little tax to help hide their fraud, bump up the stock price, and cash in their stock options,'' Grassley said. “They basically made the IRS an unwitting accomplice to their fraud.''

Tax attorneys have said it would take congressional action to prevent companies that have committed accounting fraud from claiming refunds for taxes paid on false earnings.

-- NYSSCPA.org News

Posted on 05/15/03