MOYOCK, N.C., Oct. 22 /PRNewswire/ --
     Chairman Waxman has released a new thirteen page letter alleging that
 Blackwater cannot treat its personnel in Iraq and Afghanistan as
 "independent contractors," and contends that they must be treated as
 employees for IRS purposes. The Chairman's contention is incorrect.
     The United States Government has always been aware of Blackwater's
 relationship with its deployed personnel. The U.S. Small Business
 Administration has determined in an official finding applying "the criteria
 used by the IRS for Federal income tax purpose," that "Blackwater security
 contractors are not employees." The Chairman's contention depends heavily
 upon a single letter from an IRS Field Office. Chairman Waxman's letter
 fails to point out that this IRS Field Office letter is not a final
 determination and by law "may not be used or cited as precedent." 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 contractor's 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.
 
 

SOURCE Blackwater