Although other states have reportedly considered the strategy, Mississippi is expected to be the first to file criminal charges against Big Four firm KPMG, in connection with benefit tax work the company performed for WorldCom.
Mississippi's attorney general has been vocal about his desire to take the accounting firm to court for a tax strategy that allowed WorldCom, now called MCI Inc., to treat management foresight as a royalty. WorldCom had been based in Mississippi until 2003, when it moved to Virginia. The state has said that it was not told the foresight category was included, which resulted in billions of dollars being shielded from state taxes.
This spring, Mississippi was the first state to settle back-tax claims with the former WorldCom, in a $100 million cash settlement that also included the telecommunication company's former headquarters. As many as 15 other states, all having had similar tax breaks claimed in their states, could join the claim.
