Unpaid Payroll Taxes Total $58 Billion

[dysfunctional press]

Source: abc news

Abuse of Federal Tax System Spurs Congressional Hearing
By ELISABETH LEAMY
July 28, 2008

Every time an American worker gets paid, part of their check is supposed to be set aside for Social Security and Medicare, federal programs to workers with their retirement and medical expenses. But a government investigation released early exclusively to ABC News today, found that, as of Sept. 30, 2007, 1.6 million businesses had failed to pay these taxes.

"What's happening is that these companies are using our money like a petty cash fund," Sen. Norm Coleman, R-Minn., ranking member of the Senate Subcommittee on Investigations, said. "And these company owners are living the good life, driving fancy cars, all with your money." The Government Accountability Office report said the business owners took the money out of their employees' paychecks, but then kept it for themselves instead of turning it over to the government.

Among the examples from the report was a consulting business that failed to pay more than $1.5 million in payroll taxes since 2007. The company's owner diverted much of the money into his personal account. A construction company didn't pay $2.5 million in taxes over 12 years and used the money to prop up its business. And a health care company racked up $8 million in unpaid taxes, diverted from employee salaries, over seven years. The owner claimed he couldn't afford to pay the taxes and filed for bankruptcy multiple times, despite the fact that he lived in a multimillion-dollar mansion. The IRS also found many business owners are repeat offenders, failing to make payroll tax payments at three or more different businesses.

Overall, the investigation found that companies failed to pay $58 billion in payroll taxes since September 2007, which came at the expense of employees and the government. The GAO criticized the IRS itself for trying to get problem companies to pay voluntarily, instead of filing liens against them to seize their assets, or imposing fines against the owners to hold them personally responsible...

Read more: http://abcnews.go.com/WN/story?id=5467328&page=1

---

This is exactly what happened to me, and it wouldn't surprise me if it turned out that the 'construction company' mentioned
was National Pre-cast formerly of crystal lake il. when i became disabled 10 years ago at age 38, my two-plus years at national precast accounted for over 12% of my lifetime earned wages. unfortunately(for me, not them) they never paid into the government the fica money they took from my check- and the result is that i DO NOT get credit for the money- my monthly disability check is 12% less than it should be(well- it's based on an amount that's 12% less- i honestly don't know exactly by how much it impacts the monthly payments.)

they're long gone and bankrupt now- so i have no recourse(or restitution) in the matter...:banghead:

although- i can make a suggestion that could help other people who might eventually face the same situation-

save every single one of your pay-stubs/statements from every job for your entire life. be it weekly, bi-weekly, monthly, whatever...i was told by the ss officer that if i had kept my by then 20-year-old pay stubs, i probably could have been credited for it. get yourself a file folder/shoebox for that purpose ONLY, be diligent about putting them in there- AND NEVER throw it away.
ever.

[dweller]

1. this needs GP viewing

as it explains why Soc.Sec failure is at the forefront of the Repug agenda.

but why is Norm Coleman pointing this out? How does this affect Al Franken's run?

dp

[mopinko]

2. pointing it out so that people will feel like it is a rip-off.

make them more eager to privatize it.
but i think this is one reason why they send you a statement every year.

[dysfunctional press]

15. when did they start sending out the annual statements...?

isn't that a fairly recent development?

[mopinko]

24. it's been a few years.

perhaps that was the vanguard of the war- let people know just how much money they will receive, understated by the fact that they are still working and will likely earn more later in their careers (ok, not that likely these days) then convince them that even that amount is likely to melt away on them.

[spag68]

3. Payroll

This is just one more reason to back unions. One of the things that unions do, is keep tabs on the company's in their collective bargaining agreement. Most times union company's have to have money set aside for instances when these cost must be paid and they do not have the money. Also union shops are monitored by the union to make sure they are living up to their agreements. The flip side is that union members have to be educated about their job, and have a set of rules they must follow. It is the responsibility of the members to give an honest days work. All union members should remember that , and make sure that they and all the brothers and sisters do their best to make their company's succeed. The union way is a fragile arrangement that benefits all concerned, if it is done right. I curse Nixon and Reagan for what they have done to us, but this idiot in the white house has put all workers in the same sinking boat. We need to stand together now, more then ever, it can be done and will be done.Be good to each other, it's all we have in the battle for a living wage.

[defendandprotect]

5. We need more UNION talk at DU . . .

Of course, Greenspan also activated higher FICA payments long, long ago to provide extra
borrowing money for Poppy Bush ---

The payments are higher on the middle class/poor than they should be ---
and we need to substantially increase the CEILING ---

Many also don't know that ORIGINALLY FICA WAS PAID ON THE BASIS OF 2/3RD BY THE EMPLOYER
AND 1/3RD BY THE EMPLOYEE . . .

In Jimmy Carter's administration --- it was change to 50%/50% --- !!!

Also, unemployment insurance used to be totally paid by employer ---
after all, they're the ones in control on that issue!

[dysfunctional press]

21. it wasn't for poppy- it was for ronbo raygun...

the dirty little secret is that his huge tax-cuts for the weally weally wealthy decimated tax revenues- so...

they doubled the fica premium(none dare call it taxation) on the working castes, then used the SS trust fund revenues as a revenue stream to fund the government.

f.y.i. -raising the fica premiums is only considered/referred to as a tax-hike when democrats do it.

[defendandprotect]

29. No -- the first change came in the Carter adminsitration . . at the end of it ---

I don't know the story behind that but it was the BIG change in FICA ---

it went to 50/50 vs the old 2/3rds by employer and 1/3rd by employee.


LATER . . . in Poppy administration he wanted to send the IRS after the poor to raise more

pocket money -- and there was a big stinky reaction to that ---

So . . Greenspan came up with the idea of raising the FICA rate --- which fell

on the shoulders of the middle class and poor --- and that's what they did . . .

I think it was in the middle of the night?


We need to raise that CEILING . . . way, way up --- !!!

[dysfunctional press]

14. i was in a union at the time. so was everyone who worked there.

the unions make sure that the contracting companies pay THE UNIONS their share of the worker's paycheck- they didn't do anything to monitor the fica money going to the government.

don't get me wrong- i'm not against unions at all- but like everywhere else- absolute power corrupts, absolutely.

[defendandprotect]

4. ...another neo-con tactic to destroy government . . .don't enforce laws which protect

the public . . .

YES . . . about 15 years ago I was astonished to find that a very popular watering hole at

the Jersey Shore was closing up -- and making quite a valuable bit of real estate available

to go on the market. It seems that the Restaurant/Bar -- a large place -- which had been

there for decades STOPPED turning over FICA payments to government ---

At that time they did catch up with them --- and they were out of business, totally!

Evidently, they didn't have the money to pay up ---


After realizing that was goin on .... I happened to be working for a guy who was a crook

anyway -- but before I left I wanted to be sure that he had turned my payments over to

government --- I found out he hadn't --- and was able to force him to do so.

[depakid]

6. When I heard a snippet on the radio, I thought this was another "independent contractor" scam

but no.

these businesses witheld from from their employees and didn't pay the government?

And they're getting away with it?

:wtf:

[sutz12]

7. Wow, talk about criminal behavior....

Don't you have records on your annual W-2's covering what was withheld for FICA that could back you up?

[Truth4Justice]

8. Always keep you last pay-stub of the year if you don't keep them all. Proof positive.

[Mnemosyne]

9. But W-2's are usually printed and sent by the employer, I always did, so

there is a possibility they could falsify those to hide their trail as long as possible.

Gee, *co hasn't made me cynical at all...

[Lasher]

11. The same is true of check stubs.

I would think W-2s should be just as good as check stubs to prove payroll tax witholding.

I don't know how we got to a point where it is optional for businesses to pay these taxes. Try telling the IRS at the end of this year you don't have the money to pay your income taxes and see how that goes over. More than that, business owners are embezzling this money from employees. They should not be able to escape retribution by filing bankruptcy.

[Mnemosyne]

35. Apparently, it is now alright for employers/corporations to steal

anything not 'nailed down'.

I hate being cynical, not my nature, or at least it didn't used to be. :(

[dysfunctional press]

38. i blame gordon gekko...and his "greed is good" mantra.

[elehhhhna]

17. regardless, if they took it from your pay you're covered...

unless we're talkng about insurance premiums -- they pocket those, too, and you're sol.

[Mnemosyne]

34. My ex- worked almost 20 years for a company, welder. One day the "bosses" announced they were

closing down and they had a half hour warning before lunch. All of the retirement paid in had disappeared, never did hear if it was ever returned either. The deduction was always listed though. Even the stubs did not seem to help for those with them, my ex- and he was grateful I saved them, but last I heard were still fighting in court since 1985.

I can see where the pay stub could cya though. Just most never save their stubs which will leave them screwn hard.

Rotten greedy bastards everywhere anymore.

[elehhhhna]

16. the w-2 is fine, & if you lose an old one, the IRS has copies.

[dysfunctional press]

19. how long does the i.r.s. keep the copies for?

it was 20 years in the past then, and 30 years past now...
iirc- i asked the ss officer about that option, and for some reason or another, he indicated that it wasn't one. i honestly don't remember. maybe i should go in and talk to someone again. we live in a different area, so it would be a different office with different officers...
but then- it's difficult to believe that a disillusioned and vocationally frustrated government bureaucrat would/could give out false or misleading information...right?...:banghead:

[elehhhhna]

31. Go ask! If you are owed benefits, even retro from 30-40 years ago,

they'll cut you a check for the diff.

[elehhhhna]

36. IIRS, soc. sec. keeps copies of your earnings records forever.

[dysfunctional press]

37. but- the SS only keeps records of what is actually paid into them...

my SS records were blank for the time that i worked at the company that stole my money. the SS officer asked me what i had been doing during that stretch and that they had no record of me having worked any hours or had anything paid into the system.

[dysfunctional press]

13. single guys in their early 20's aren't always the most adept record-keepers

:shrug: live and learn.

[Indenturedebtor]

10. What a shocker. I'm sorry to hear that happened to you. This is what they mean

When they say that "regulation stifles business". Snakes cheats and liars. 58 billion. That's a lot of good responsible business owners... yikes.

[dysfunctional press]

26. the article is unclear if the $58 billion is "up to" or "since" september 2007...

here's what it says in the first paragraph:

But a government investigation released early exclusively to ABC News today, found that, as of Sept. 30, 2007, 1.6 million businesses had failed to pay these taxes.

but further down the page, it's expressed this way:

Overall, the investigation found that companies failed to pay $58 billion in payroll taxes since September 2007, which came at the expense of employees and the government.

perhaps the actual report will clear that up...:shrug:

[candystrap]

12. Hope they'll have their day in the court

First of all,I'm sorry for what happened to you with your former company. This is alarming to hear especially for us who work hardest and take comfort that our financial obligations are settled. I agree that we should regularly keep track of pay stubs and to add, check with the authorities if we are on time in our payroll taxes.

[formercia]

18. Corporate malfeasance.

This is one of the problems of limiting liability by forming a corporation.

That's why LLP stands for Laws are for little people and LLC stands for laws are fore little companies.

These criminals can live in luxury knowing they have little or no personal liability.

[dysfunctional press]

20. that's the Golden Rule- the people with the gold, make the rules.

i really, really want to live long enough to see the revolution...

but at this point i'd settle for even a modicum of social justice touching the upper castes.

[Blue_Tires]

22. by now we all know only the little people are actually supposed to pay taxes

while everyone on top laughs...

1.6 MILLION businesses? how many more are there in the country?

[redqueen]

23. I shouldn't be surprised... but somehow, I am.

The people who stole this money... they stole from their own retired parents and loved ones... from the employees who do the work to earn the profit the owner enjoys... I can't help wondering how many of these are small businesses, where owners usually know their employees.

[AlphaCentauri]

25. the shorthcut to republicans tax cuts

[maxrandb]

27. I guess my stupid "Wing-nut" co-worker is right

He argues that "tax-cuts" are good, because the "rich find a way not to pay taxes anyway".

Try to get your head around that argument!

I think he just says that becasue it's what Rush told him.

[joeglow3]

28. There is a lesson to be learned here

ALWAYS check your Social Statements against your own records. Had you looked at it, you would have seen Social Security reporting zero earnings for that. Makes you wonder how many of these companies would have been caught if just ONE employee took an interest in their retirement.

[dysfunctional press]

32. this was back before those statements were being sent out...

i think that you could get them, but they had to be requested- and i don't actually know anyone who ever did.

[slackmaster]

30. I do have every pay stub I've ever received in my life, but W-2's should be good enough

I'm just compulsive.

You should also review your annual statements from the Social Security Administration for accuracy.

[dysfunctional press]

33. my father still has all of his- and he's been retired almost 10 years.

every christmas, one of his presents was his new timebook- he'd write a short description of what he did that day and his hours on each days page, and staple his check stub to the friday page of that week. he still has a couple banker's boxes full of them. it's the one habit of his that i wish that i had picked up.

as for the annual ss statements- iirc, i was already receiving benefits when they started doing that- but yes, it's a good habit(another one) for people to get into.