Isn't that how they got Al Capone, too?

Henry Waxman accuses Blackwater of tax evasion.

Published October 22, 2007 2:55PM (EDT)

One more potential problem for Blackwater USA: In a letter sent today to Blackwater CEO Erik Prince, House Oversight and Government Reform Committee chairman Henry Waxman suggests that the company's designation of its security forces as "independent contractors" may amount to tax evasion.

"According to an IRS ruling in March 2007, Blackwater violated federal tax laws by treating an armed guard as an 'independent contractor,'" Waxman writes. "The implication of this ruling is that Blackwater may have avoided paying millions of dollars in Social Security, Medicare, unemployment, and related taxes for which it is legally responsible."

One offsetting factor: Whatever Blackwater may have paid in payroll taxes on the guy who came up with the idea of a new, less-menacing Blackwater logo, it was probably too much.

By Salon Staff

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