WASHINGTON -- Enron, and MCI -- recently known as WorldCom Inc., are seeking huge tax refunds from the government despite having concealed massive debts for years, the ****Wall Street***** journal reported Friday.

"Fraud or not, the current tax code makes no distinctions. It is a basic tenet of tax law -- both for individuals and corporations -- that those who overpay are entitled to a refund," said the daily.

Enron and MCI, which concealed debts from shareholders and the government, are in the process of collecting or filing for tax refunds. Qwest Communications International Inc. also is likely to seek a refund, and Healthsouth Corp. said it is also considering the move, AFP quoted the daily as saying.

Even if the tax credits from the internal revenue service "are ultimately lowered as part of settlements, observers believe that the federal government will probably be out hundreds of millions of dollars," it added. "It's not the government's money, it's the shareholders' money," said Richard Lipton, a tax attorney for the Chicago-based law firm Baker & McKenzie,

Adding that fraud should not prevent companies from recuperating tax overpayments.

He said corporate penalties for filing a false tax return are capped at half a million dollars.

Enron, WorldCom, Qwest and Healthsouth in the 1990s overstated their earnings by billions of dollars and have incurred charges of accounting fraud.