Dem: Blackwater Dodged Millions in Taxes

Demblackwater_mn A controversial U.S. private security company under intense scrutiny for its aggressive use of force has a new problem: an allegation it illegally avoided paying millions of dollars in taxes.

In a letter to Blackwater security firm president Erik Prince, Rep. Henry Waxman, D-Calif., charged that the company illegally dodged “millions” in payroll taxes by misclassifying its security guards as “independent contractors” rather than employees.

That way, Blackwater guards were responsible for paying their own Medicare, Social Security and unemployment taxes — an “illegal scheme,” according to Waxman, chairman of the House Committee on Oversight and Government Reform. If the firm had classified its armed guards as employees, which Waxman says it was required to do, it would have been responsible for covering those taxes.

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