The Empire 233

'Pentagon Contractors Owe $7.7 Billion in Unpaid Taxes
By Thomas D. Williams t r u t h o u t Report

A federal watchdog agency insists that its investigations clearly show the US government is facing serious long-term funding shortfalls, while federal contractors, doctors and medical suppliers, regularly receiving federal Medicare money, owe billions in unpaid taxes.
Earlier this month, Comptroller General David M. Walker of the US General Accountability Office opened one of his critical summary presentations to a Defense Department acquisition conference with: "The federal government is on a 'burning platform,' and the status quo way of doing business is unacceptable...."
He cited "past fiscal trends and significant long-range challenges; selected trends ... having no boundaries;" outlandish government funding demands due to the wars in Iraq and Afghanistan, as well as natural disasters like Hurricane Katrina; outdated federal policies and practices; and finally, "rising public expectations" for results.
Within the past six years, said Walker, the government's long-term financial exposures in debt, health and Social Security have jumped 147 percent to $50.5 trillion. If this trend continues, said the GAO report, federal spending will need to be cut by 60 percent and taxes will have to double to balance the budget in the year 2040. To close off this sweeping gap, the economy would demand double-digit growth for every single year for 75 years, he said.
Meanwhile, a recent GAO inquiry reveals that about 113,800 contractors working for a variety of federal agencies, including the Pentagon and the General Services Administration, have built up $7.7 billion in unpaid taxes. This matches untidily with a March GAO report saying that more than 21,000 doctors, health professionals or medical suppliers, collecting billions in federal Medicare dollars, simultaneously owed more than $1 billion in federal income taxes. Federal agencies either have to rely on their hired contractors and medical providers to disclose what they owe the IRS, or dig out the data elsewhere in public record disclosures of the debts, said the GAO report. It goes on to explain that the IRS does not file public liens on the property of all tax debtors, nor does it have a central file where federal agencies can obtain those liens.
Since much of what the federal contractors owe the IRS arises from withholding taxes for employees, said the GAO, they actually gain a competitive advantage over other contractors from not paying. That results from the tax-delinquent contractors having more money readily available so they can post lower bids for federal work, the GAO inquiry revealed.
But the GAO said that neither the federal agencies hiring contractors nor federal officials paying out Medicare fees to its doctors, health professionals or medical suppliers have the legal tools to collect back taxes owed by them. The Internal Revenue Service is not permitted to communicate with other federal agencies about what taxes federal contractors or medical suppliers and doctors receiving Medicare fees owe. Federal law, the GAO concluded, needs enhancing to make sure the IRS and federal agencies have sufficient tools to ensure that federal contractors and Medicare doctors don't owe back taxes. "With the serious fiscal challenges facing our nation, the status quo is no longer an option."On the other hand, the GAO said the IRS has for several years experienced trouble with its automated coding system to sort out tax delinquents. For example, said the GAO, in 2005 the IRS faultily excluded $2.4 billion in debt from its active tax-levy system.'

Lees verder: http://www.truthout.org/docs_2006/043007J.shtml

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