According to The Wall Street Journal, MCI and Enron Corp. are in the process of filing and perhaps collecting refunds or credits. Others are expected to line up soon, including Qwest Communications International Inc., which plans to "restate" $2.2 billion in revenue.

It makes sound business sense. MCI reportedly has already collected tax refunds of nearly $300 million on now-discredited profits. Even if the companies have to admit that they fudged on their earlier earnings reports in order to get the refunds, it's worth it, because the most the federal government can tag them in corporate penalties for making a false tax return is $500,000. Estimates are that the federal government probably will lose hundreds upon hundreds of millions of dollars in tax refunds to companies involved in outright fraud.

Of course, it was not the government's money to begin with. It belongs to the companies' stockholders, or creditors or pension plans. If the income isn't legitimate, neither is the tax assessment against it.

However, this might be a good time to rewrite the tax code, to prohibit tax refunds in cases of fraud. That would provide an additional and obviously needed disincentive to cooking the books.