Lawmaker accuses Blackwater of tax evasion

[maddezmom]

Source: Reuters

WASHINGTON (Reuters) - The chairman of a congressional committee said on Monday that documents obtained by his panel suggest that private security contractor Blackwater USA "engaged in significant tax evasion."

But the company -- under scrutiny already over deadly shootings in Iraq involving some of its personnel -- told Reuters that the lawmaker's assertion is "incorrect."

U.S. House of Representatives Oversight and Government Reform Committee Chairman Henry Waxman accused Blackwater of "failing to withhold and pay millions of dollars in Social Security, Medicare, unemployment, and related taxes."

The California Democrat said the firm "sought to conceal its conduct from Congress and law enforcement officials."

Blackwater spokeswoman Anne Tyrrell said in an e-mail that Waxman argues Blackwater cannot treat its personnel in Iraq and Afghanistan as 'independent contractors,' and contends that they must be treated as employees for IRS purposes.



Read more: http://news.yahoo.com/s/nm/20071022/pl_nm/iraq_usa_blackwater_congress_dc;_

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now AP has it. too.

Waxman: Blackwater violated tax laws By ANNE FLAHERTY, Associated Press Writer
3 minutes ago

WASHINGTON - The Democratic chairman of a House watchdog committee said Monday that Blackwater USA violated tax laws and may have defrauded the government of millions of dollars, a charge the embattled security firm said is groundless.

Rep. Henry Waxman, who chairs the Committee on Oversight and Government Reform, released a March 2007 letter from the Internal Revenue Service that states the company's classification of a security guard as an independent contractor, instead of company personnel, was "without merit."

Under U.S. law, companies must pay Social Security and other federal taxes on their employees. But unlike other security companies operating in Iraq, Blackwater says the guards it trains, equips and deploys to Iraq and elsewhere are independent contractors hired directly by the federal government.

"By classifying its armed guards and other personnel as independent contractors instead of employees, Blackwater has apparently evaded withholding and paying these taxes," Waxman, D-Calif., wrote in a letter to Blackwater chief Erik Prince.

more:http://news.yahoo.com/s/ap/20071022/ap_on_go_co/us_blackwater

[onehandle]

1. Go Henry! Capone his ass! nt

[Lone_Star_Dem]

2. It just keeps piling up on Prince

Couldn't be happening to a more deserving person IMO.

I'm very curious as to the two Iraqi military aircraft they attempted to steal also.

Blackwater is one of the biggest criminal entities in the US right now. And they're largely subsidized by our tax dollars.

[The_Casual_Observer]

3. So, they aren't paying any employment taxes!

This is going to pretty much wash up blackwater.

[TexasBushwhacker]

4. EXCELLENT

Not only will they be able to nail them on not withholding taxes, but once they go through all the records, my guess is that they'll find that they've overbilled the US government for their services. After all, if they've got a cost plus contract like everyone else, they wouldn't want to be reporting their "employees" wages every quarter. It would be really easy to check the numbers against their billings.

[xchrom]

5. i think i'm having a psychic impression --

prison for prince!

[bobthedrummer]

6. K&R

[GliderGuider]

7. How about arson?

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=102x3037848

[soothsayer]

8. yeah, pretty suspicious

[LiberalFighter]

9. Small Business?? Do they qualify as a small business for SBA services?

Tyrrell said the government has always been aware of Blackwater's relationship with its deployed personnel, adding that the Small Business Administration determined that for tax purposes, Blackwater security contractors are not employees.

[NYC]

17. Link to Small Business Administration.

http://www.sba.gov/

Lots of listings re payroll taxes:

http://search.sba.gov/query.html

I'm wondering. Even if they did qualify for free assistance from the SBA, are they able to claim reliance on SBA advice as defense. I doubt it.

If you get advice from the IRS, and an audit results in a finding in opposition to that advice, it is clear that you cannot claim that the IRS advice is a defense. When you get the advice from the IRS, they make it clear to you that it is advice only, not engraved in stone.

[earth mom]

10. Woo Hoo! We get to watch the IRS kick blackwater a$$!

:rofl:

:woohoo:

:bounce:

[tanyev]

11. That's why the Pugs want to get rid of the IRS.

Too many of them get busted.

[earth mom]

12. Well, the IRS is an illegal entity in the first place but...

I'm happy in this case that they exist. :evilgrin:

[UpInArms]

13. Lawmaker accuses Blackwater of tax evasion

Source: Reuters

WASHINGTON (Reuters) - Private security contractor Blackwater USA "engaged in significant tax evasion," a U.S. congressman said on Monday as the company faced scrutiny over the killing of Iraqi civilians.

Rep. Henry Waxman, chairman of the U.S. House of Representatives Oversight and Government Reform Committee, accused Blackwater of "failing to withhold and pay millions of dollars in Social Security, Medicare, unemployment and related taxes."

The California Democrat said the firm "sought to conceal its conduct from Congress and law enforcement officials."

Blackwater spokeswoman Anne Tyrrell said in an e-mail that Waxman argues Blackwater cannot treat its personnel in Iraq and Afghanistan as independent contractors and contends they must be treated as employees for IRS purposes.

"The chairman's contention is incorrect," Tyrrell said.

Read more: http://www.reuters.com/article/politicsNews/idUSN2245858720071023?sp=true

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hmmm.... wasn't tax evasion what they finally got Al Capone on?

[Gman]

14. I cannot even imagine making an argument that these guys are contractors

The contractor ruse is used often by small companies and is probably abused the most in order to avoid payroll taxes. Blackwater is so full of theirselves that they honestly think they're above any American law as well as Iraqi law. They need to be brought down in a heap of dust.

[lonestarnot]

15. "failing to withhold and pay millions of dollars in Social Security, Medicare, unemployment, and rel

ated taxes,"... "other personnel?" WTF! Oh and only $196 Billion fucking more requested! FU BUSHITLER!

[donheld]

16. Good, Let'em rot in jail

:grr:

[kineneb]

18. this so does not surprize me... mercenaries being mercenary!

not paying their portion of employment taxes... naughty, naughty... lovely orange jumpsuit is just waiting to be occupied by Mr. Prince.