Blackwater spokeswoman Anne Tyrrell just released the following statement in response to Rep. Henry Waxman’s (D-CA) allegations that Blackwater has committed tax evasion:
Chairman Waxman has released a new thirteen page letter alleging that Blackwater cannot treat its personnel in Iraq and Afghanistan as âindependent contractors,â and contends that they must be treated as employees for IRS purposes. The Chairmanâs contention is incorrect.
The United States Government has always been aware of Blackwaterâs relationship with its deployed personnel. The U.S. Small Business Administration has determined in an official finding applying âthe criteria used by the IRS for Federal income tax purpose,â that âBlackwater security contractors are not employees.â The Chairmanâs contention depends heavily upon a single letter from an IRS Field Office. Chairman Waxmanâs letter fails to point out that this IRS Field Office letter is not a final determination and by law âmay not be used or cited as precedent.â The Chairman also fails to mention that Blackwater has appealed the ruling by the IRS Field Office and that no final determination by the IRS has been made.
At the recent hearing before the Committee, Blackwater answered questions about the difference between employees and independent contractors and described why the contractor status was a superior method to suit the contractorâs needs. It is unfortunate that the Chairman has relied upon a one-sided description of the issue to color public perception without all the facts being presented.