Reports are that MCI, formerly WorldCom Inc., is close to a settlement that would pay out $315 million to 14 states and the District of Columbia in order to settle back tax claims.
The states have accused MCI of illegally shielding billions of dollars from state taxes between 1999 and 2002 using a royalty tax plan created by Big Four firm KPMG. The states alleged that the tax plan allowed MCI to charge subsidiaries $24 billion for management expertise -- defining the payments as royalties and shielding the income from state taxes.
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