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IN BRIEF / TAXATION

Senate Acts to Deny False-Profit Refunds

May 16, 2003|From Bloomberg News

The U.S. Senate moved to block companies from claiming tax refunds after making payments on profits they falsely said they earned. The provision would not apply to the past actions of Enron Corp., WorldCom Inc. and Qwest Communications International Inc., which inspired the Senate action.

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

The provision raises criminal penalties for tax fraud to the amount overpaid due to misreported earnings.

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