A longtime admirer of large-company management, he made a careful study of what these managers did when revenue turned south. He noted certain approaches that senior executives employed when revenue declined sharply and stock prices plummeted. Almost inevitably, they restructured.

Charlie wasn't quite sure he knew what that meant, but he noted several features that seemed to be widespread. When companies restructured, they normally rewarded senior executives with salary increases and bonuses. And if executive stock options were underwater, thus worthless, they issued new options. If bonuses evoked stockholder disapproval, they substituted "cash retention options." And when they restructured, they did something else. They fired people.

Well, Charlie had already done this. He had fired some people on the engineering staff, but that didn't help. Though it reduced payroll expenses, it more sharply slashed revenue because there were no new products to boost business.

Very carefully, Charlie studied his balance sheet and his profit-and-loss statements. And there it was, staring at him. A major expense that he had often overlooked. Federal income taxes. If he found a way to stop paying income taxes, that would substantially boost his profits. Unfortunately, that was illegal and Charlie was essentially an honest, law-abiding citizen. So he convinced himself that he would merely delay the payment of taxes to the Internal Revenue Service. He fully intended to pay what he owed when business picked up-even if he had to pay the mandated 20 percent penalty.

And then-imagine his joy. He might not be penalized after all. A recent IRS announcement declared that if a company confessed that it had been cheating on its income taxes and named the promoters who helped it cheat, it would be forgiven and the penalty would be waived. Though the revenue service reported that abusive corporate tax shelters were its most serious enforcement problem and though corporations had bilked the IRS of at least $14.7 billion just in the year 2000, leaving the underpayments to be covered by the rest of the population, all would be forgiven if they 'fessed up. The penalty would be waived and the tax returns of the rest of the population would be scrutinized more carefully.

"This is our Christmas present to big companies," said Larry R. Langdon, the IRS commissioner for midsize and large businesses.

Alas, Charlie's joy was short-lived. His company was not large enough to enjoy this Christmas present.