People who are known or strongly suspected of being corrupt being put in positions of power is hardly new. I am very doubtful that it is more common now than in the past.
Obviously, I agree that we should all think of others when we act. That is just as true now as it has ever been.
We still have a hope in this corrupted world. Regarding the moral decay, each one of us should measure ourselves with the same measuring stick against politicians -- well from believers' point of view.
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=35867216 One person on the first lady's guest list was Leonard Abess Jr., a Miami banker who received a $60 million bonus from the proceeds from the sale of shares of City National Bank in Florida and gave it out to his 399 workers and 72 former workers.
Making suckers out of the government, employees By Lydell C. Bridgeford October 1, 2008
In a new report from the Government Accountability Office, congressional investigators say 1.6 million businesses did not send taxes to the Internal Revenue Service regarding employees' wages, Social Security and Medicare payments - essentially keeping money from employees' paychecks that was due to the government.
Delinquent employers owe the IRS about $58 billion in federal payroll taxes from employees' wages, GAO reports. The accumulated amount covers a 10-year period.
Moreover, the report finds that the number of businesses with more than five years of payroll tax debt has nearly tripled, from 5,000 in 1998 to 14,000 in 2007.
Some analysts and experts believe that the nation's payroll tax deficit has ballooned over the past 10 years because of IRS dependence on the voluntary compliance.
They also contend economics play a part, believing more business owners defraud the government or skip payments when trying to survive a tight quarter.
Taking it to Congress
GAO researched the IRS database of unpaid taxes as of September 2007 to determine the magnitude of unpaid taxes and identify, to the extent possible, the employers or company officers who repeatedly abused the tax system by not remitting withheld payroll taxes.
Steven Sebastian, director of financial management and assurance at the GAO, recently testified about the report before members of the Senate Homeland Security and Government Affairs Committee's Permanent Subcommittee on Investigation. The committee requested the report.
"Allowing businesses to continue to not remit payroll taxes affects the general public perception regarding the fairness of the tax system, which may result in lower overall compliance," Sebastian said.
Employers withhold certain taxes from an employee's wages and then report that amount on end-of-year tax documents, which shows the IRS the amount withheld.
"This is not a difficult area to audit. It sticks out like a sore thumb because it's clear to see that companies have held those amounts, but have not paid them over to the agency," says Thomas Cryan, a member of the law firm Miller & Chevalier.
Companies that are behind on payroll taxes likely are paying off other vendors to stay afloat and believe that they will be able to catch up on tax payments down the road, explains Cryan, who focuses on employee benefits and tax issues.
"We are basically looking at small and midsize businesses that get into financial trouble and will basically dip into the employees' withholdings taxes as a form of a free loan," Cryan remarks.
They are holding the payroll taxes, but not transferring them to the Federal Tax Deposit system.
"It's not businesses that have lots of operating income that typically get in this type of trouble," he adds.
Course correction
Cryan believes that the only way to technically correct the problem is for the IRS to jump on payroll tax deficits before they spiral out of control.
Yet, the $58 billion figure may also reflect the government's view that the cost and time to [proceess] the debit in terms of setting up individual tax liens and garnishing wages may surpass the actual cost of the debit.
"Although federal regulators can pursue individual officers of the company, that process can take awhile, because the parties and their attorneys may drag out the procedure, which makes it difficult to collect the debt.
"In some cases, trying to collect the debt is trying to get blood out of a stone," explains Cryan.
Moreover, the likelihood of collecting what is owed from a company decreases significantly the longer payroll taxes go unpaid.
Consequently, 52% of existing payroll debt is now uncollectible.
"While the IRS collects 99.8% of all payroll taxes, leaving $58 billion on the table is still unacceptable," Sen. Carl. M. Levin (D-Mich.), the subcommittee chairman, commented in a statement.
Levin recommends legislation that would create an electronic filing system, thus replacing "the current wasteful, burdensome and inefficient paper filing system."
He also is calling for laws that would speed up the process in which the IRS can make the owners or officers of the delinquent businesses personally liable for the outstanding debt.
The IRS, on average, took nearly two years to commence collection on a payroll tax debit, according to the GAO.
"IRS should consider strong collection action against both the business and the responsible owners or officers to prevent the further accumulation of unpaid payroll taxes and to collect those taxes for which the business and owners have a legal and fiduciary obligation to pay," GAO's Sebastian recommended. No part of the content contained herein may be transmitted, redistributed, copied, stored, downloaded, abstracted, disseminated, circulated or included as part of any other service or product. For all permissions, please contact Damian Nash at 212-803-8365, damian.nash@sourcemedia.com.
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