Tuesday, October 23, 2007

Jumping the gun on latest allegations

Here's California headline generator Henry Waxman's latest anti-Blackwater move: Take a preliminary letter from an IRS field office on a matter in which the IRS has made no final judgment, and accuse the security provider of evading taxes.

Waxman is using an IRS field office letter from March that says Blackwater should treat a contractor as an employee. Blackwater has appealed the IRS letter, saying that the individual was an independent contractor who was responsible for his own FICA and tax withholding. The letter says the ruling "may be applicable to any other individuals engaged by the firm under similar circumstances." Blackwater says another federal agency said it was operating safely under IRS guidelines.

Waxman released the IRS field office letter to the press on October 22, generating headlines that Blackwater stands accused of tax evasion. (The IRS never accused the company of tax evasion; only the congressman did.)

According to CNN, "Blackwater said the company appealed the ruling, and 'no final determination by the IRS has been made.'"

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