WorldCom plan may have avoided state taxes

[QuietStorm]

Thu August 14, 2003 03:33 AM ET
NEW YORK, Aug 14 (Reuters) - WorldCom may have routed $19 billion in revenue through one of its units to cut down on state tax bills, as part of a strategy devised by KPMG and used in the years following WorldCom's acquisition of MCI WCOEQ.PK , a court filing claims.

According to a filing by dissenting bondholders of MCI, who oppose a reorganization plan the company has submitted, the company sent $19 billion in revenue through unit MCI WorldCom Brands LLC, which had been assigned the rights to WorldCom's trademarks and intellectual property.

MCI, whose legal name is WorldCom, filed for bankruptcy protection in July 2002 and expects to emerge in October.

The revenue at issue stems from charges by MCI WorldCom Brands to other WorldCom subsidiaries for the right to use the WorldCom brand name.

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