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October 22, 2007
Waxman Targets Blackwater
This time it's a tax thing.
by Tina Grazier
The tax code is a convoluted piece of junk and this investigation into Blackwater USA proves the point. The bone of contention (beyond mere harassment) is that Blackwater has named some of the people they train, and who work as guards in the Middle East, as “independent contractors” rather than “employees.”
Rep. Henry Waxman, who chairs the Committee on Oversight and Government Reform, released a March 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." ** "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.
Naturally, Blackwater USA disagrees:
Blackwater spokeswoman Anne Tyrrell said in an e-mail statement to The Associated Press that the company has appealed the IRS ruling and that no final determination has been made. Further, she said, the U.S. Small Business Administration has told the company that Blackwater security guards do not have to be classified as company employees. "It is unfortunate that the chairman has relied upon a one-sided description of the issue to color public perception without all the facts being presented," Tyrrell said.
The rules governing independent contractor status include issues of company control over a workers time and schedule. OK…fine and dandy...businesses do their best to comply. The problem I have is the kind of “control” that government has over private business affairs.
I don’t believe government should have the power to decide when and how and to what degree an employee and employer work out scheduling and compensation. Every business is different and every employee has different skills and needs that he brings to the job. A one size fits all code, a code that serves the governments needs rather than those of the employer and employee is limiting, adversarial, and often hard to interpret or fit into the structure of the business.
The Big Brother nature of the IRS is bad enough, but add to that the complexity of the tax code and you have the perfect hammer for harassment, fines, penalties and interest.
I went online to check the tax code regarding employee designation and found a helpful tax attorney website:
After the usual disclaimer about using or citing the information to determine the status of workers for tax purposes (it was designed as a “training” tool only) the file went on to say things like:
…must be determined accurately…important for accurate, timely, legal filing and paying…the legal standard can be difficult to apply…also, standards can change…
One hundred and sixty pages later and the “training” is done…but, subject to change as previously noted.
If you want to know why business owners are frustrated at government just take this one case. Multiply it by thousands of times and you will begin to get a feel for the ways that government rules and regulation make being in business a hassle and a headache...and at times, very expensive in terms of time and money. If you think you don’t care or it’s not your problem, consider the many products you buy that cost more because of the complexities associated with government's BIG BROTHER interventions.
Find the original AP story that inspired this piece HERE.
(George) Harrison was inspired to write "Taxman" when he discovered how much he was earning after accounting for taxes. As Harrison said, "'Taxman' was when I first realised that even though we had started earning money, we were actually giving most of it away in taxes. It was and still is typical."
On the song, Harrison sings as if he is the taxman, who is depicted as a malicious man looking for ways to rob people of their money, with lines like "If you try to sit, I'll tax your seat". *** "Should five percent appear too small / Be thankful I don't take it all" *** "one for you, nineteen for me" *** He even goes as far as advising those who die to "declare the pennies on your eyes."
Waxman..the Taxman? Big Brother is watching and will make you pay. .
Posted by Post Scripts at October 22, 2007 10:49 PM
Comments
Blackwater USA and various other contracting organizations are not the roving bands of mercenaries that liberals would have you believe.
Most of these groups are made up of former US military members who are interested in continuing to serve their country in a similar field while at the same time earning higher wages, and having a great deal more control over their family time. In short, these are not people who sell their guns to the highest bidder. They are skilled professionals providing their services to the US government from the private sector.
I realize that these PMC's make for great liberal satire, but they are fulfilling a necessary function. One that, last time I checked, isn't being fulfilled by self-righteous cowards at MoveOn.org and other liberal organizations.
Posted by: Nick Freitas at October 23, 2007 03:09 PM
Better the title should read Blackwater targets Waxman. lol
Posted by: Jack at October 23, 2007 08:11 PM
Nor from the Henry Waxmans of the world, Nick. Thanks for speaking in their defense!
I imagine that this is a case of piling on, mostly to keep the dems "discredit the war and everything associated" machine going.
"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...
This statement alone speaks volumes. They didn't evade they "apparently" evaded. His uncertainty makes the claim that this was done to avoid paying taxes a veiled threat. How many companies that come into question under this rule get investigated by Congress? I'll bet "few to none" would be the answer (although I don't know this). The usual procedure for something like this is a letter in the mail and then correspondence between the company and the IRS...period. This action just smells very bad.
Posted by: Tina at October 23, 2007 08:20 PM