MCI reclaims tax on false earnings

MCI, fomerly known as WorldCom, has received hundreds of millions of dollars back in taxes paid from overinflated earnings, a...

MCI, fomerly known as WorldCom, has received hundreds of millions of dollars back in taxes paid from overinflated earnings, a company spokeswoman confirmed.

"As part of cleaning up the past and obtaining money that was due to our creditors, we have received back under $300m (£186m)," the spokeswoman said. "That is all we will receive. It's a closed matter for us."

MCI could seek more in taxes it paid on earnings that did not exist.

However, the company is not seeking an additional refund in taxes, the spokeswoman said.

WorldCom overstated earnings for three years for a total of what has been revealed to be about $7bn (£4.4bn). Accounting irregularities at the company could reach $9bn (£5.6bn) to $11bn.

In an attempt to distance itself from the accounting scandal and clean up its tarnished image as it prepares to emerge from bankruptcy in September, WorldCom last month changed its name to MCI.

After WorldCom acquired MCI Communications in 1998, the company used both names for a time.

Qwest Communications International is also likely to ask for a tax refund on taxes on overstated revenue. Qwest has announced that it would restate $2.2bn (£1.4bn) in revenue for 2000 and 2001 as a consequence of accounting irregularities.

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