Defense contractors owe billions in unpaid federal taxes
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- BretByron
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By Chris Strohm cstrohm@govexec.com February 12, 2004
U.S. defense contractors failed to pay the federal government billions in taxes and, in some cases, may be guilty of criminal offenses, auditors with the General Accounting Office said Thursday.
But unpaid taxes on defense contracts might only be the tip of the iceberg, as many defense companies also do business with other agencies across the federal government, Gregory Kutz, a director of GAO's financial management and assurance office, told the Senate Permanent Subcommittee on Investigations.
More than 27,000 defense contractors owe the federal government about $3 billion in unpaid taxes as of September 2002, the watchdog agency concluded in a new report, "DoD Contractors Abuse the Federal Tax System with Little Consequences (GAO-04-95)."
The names of the delinquent contractors were not disclosed because of privacy laws.
GAO found that defense contractors primarily failed to pay payroll taxes and corporate income taxes. Kutz said GAO specifically examined 47 delinquent contractors and discovered suspected criminal abuses that could lead to felony charges. Some of the contractors work on military bases or major weapons programs.
"We don't want government contractors coming in and conducting criminal activities on military installations or buildings," said John Ryan, assistant director of the Office of Special Investigations. "I think it is absolutely necessary that we do something to [check] the contractors that we're bringing into our installations and our buildings."
Ryan said some contractors stay in existence just for a short time to get a government contract, and then dissolve and change names to get another contract. He said one contractor used magnetic signs on trucks so it could quickly change names.
In some cases, the tax evasion was flagrant. The owner of one contractor with $10 million in unpaid taxes used corporate funds to buy a home in the Caribbean and a luxury boat. Another owner took $1 million from his company to buy a large home and a luxury car.
Read More Here: http://www.govexec.com/dailyfed/0204/021204c1.htm
U.S. defense contractors failed to pay the federal government billions in taxes and, in some cases, may be guilty of criminal offenses, auditors with the General Accounting Office said Thursday.
But unpaid taxes on defense contracts might only be the tip of the iceberg, as many defense companies also do business with other agencies across the federal government, Gregory Kutz, a director of GAO's financial management and assurance office, told the Senate Permanent Subcommittee on Investigations.
More than 27,000 defense contractors owe the federal government about $3 billion in unpaid taxes as of September 2002, the watchdog agency concluded in a new report, "DoD Contractors Abuse the Federal Tax System with Little Consequences (GAO-04-95)."
The names of the delinquent contractors were not disclosed because of privacy laws.
GAO found that defense contractors primarily failed to pay payroll taxes and corporate income taxes. Kutz said GAO specifically examined 47 delinquent contractors and discovered suspected criminal abuses that could lead to felony charges. Some of the contractors work on military bases or major weapons programs.
"We don't want government contractors coming in and conducting criminal activities on military installations or buildings," said John Ryan, assistant director of the Office of Special Investigations. "I think it is absolutely necessary that we do something to [check] the contractors that we're bringing into our installations and our buildings."
Ryan said some contractors stay in existence just for a short time to get a government contract, and then dissolve and change names to get another contract. He said one contractor used magnetic signs on trucks so it could quickly change names.
In some cases, the tax evasion was flagrant. The owner of one contractor with $10 million in unpaid taxes used corporate funds to buy a home in the Caribbean and a luxury boat. Another owner took $1 million from his company to buy a large home and a luxury car.
Read More Here: http://www.govexec.com/dailyfed/0204/021204c1.htm
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As long as they make money for the elite they will be allowed to get away with anything
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- cubbingabout
- 4 months ago
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Profit is obviously the motivator for these people. That they wrap themselves up in the flag and then don't give their fair share is disgusting. However, I'm sure there will be some loophole so they don't have to pay.
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- schmengels
- 4 months ago
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