Via David Sirota, I was alerted to this:
WASHINGTON — Government contractors who owe millions of dollars in back taxes continue to get government contracts, a Senate subcommittee was told.
Some contractors, while owing taxes, bought luxury cars, boats and multimillion-dollar properties.
It could be “a new reality TV show, lifestyles of rich and famous tax deadbeats,” said Sen. Norm Coleman, R-Minn.
One in 10 companies contracting with the General Services Administration from October 2003 through June 2005 owed back taxes, the Senate Homeland Security and Governmental Affairs Permanent Subcommittee on Investigations, learned Tuesday. Their debts total $1.4 billion.
“In an age of increasingly tight fiscal discipline, that $1.4 billion could be put towards our homeland security, our children’s education or job-training programs,” Coleman said. “It adds insult to injury that these tax deadbeats are actually paid enormous amounts of money every year from American tax coffers.”
Three hearings have shown government contractors owing $7.7 billion in taxes. The studies, conducted by the Government Accountability Office, showed Pentagon contractors owed $3 billion in taxes and non-defense contractors owed $3.3 billion.
The unpaid taxes include corporate income, personal income, payroll, excise and other taxes. Willfully failing to transfer payroll taxes withheld from employee paychecks to the federal government is a felony.
Among the worst offenders with General Service Administration contracts, an emergency supplies provider, got $100,000 in contract payments while owing more than $700,000 in taxes. The company made large loans to a company officer, and the owner had a million-dollar home and a luxury vehicle. The company had a federal tax lien against it when it won the contract.
A security services company got at least $1 million in payments while owing more than $2 million in taxes. The company negotiated an agreement to pay its back taxes, but it frequently pays late. A bank closed the company’s checking account for suspected check kiting. The owner has a million-dollar lakeside home.
A public communications company got $100,000 in payments while owing more than $2 million in mostly payroll taxes. The company owner owns residential properties worth about $1 million and made about $500,000 in cash withdrawals at casinos.
Tax privacy laws prevent investigators from naming the delinquent contractors. Those same privacy protections prevent the Internal Revenue Service from sharing some tax information with government agencies negotiating contracts.
Senators said agencies do not ask potential contractors enough about their tax situation. The GSA asks applicants whether they have been indicted or convicted of tax evasion, but that does not catch many companies with poor tax records.
“One of the main problems here is that contractors are being allowed into the system in the first place and are being awarded contracts even though they owe taxes,” said Sen. Carl Levin, D-Mich.
Senators said contractors should be asked about their tax debts and state and federal liens. Under federal law and agency policy, GSA officials do not have to look at tax debts to determine a company’s fitness for doing government business.
IRS Commissioner Mark Everson said he would support creation of a central database so agencies could check for federal tax liens, information already released to the public but not collected in one place. He also asked lawmakers to make the failure to file a tax return a felony.
A government has a program to recoup some unpaid taxes from payments to federal contractors. The Federal Payment Levy Program collected $7 million from federal contractors in 2003, and the collections grew to more than $42 million last year.
Contractors that do not pay taxes may have an unfair advantage because they do not bear the same costs as companies complying with the tax laws. In a few cases, the GAO found that scofflaws beat the competition with lower prices to win contracts.
Can we get some laws going here, to get these deadbeat corporations to hand over the $7.7 billion?
How long has this been going on? Who in our government will have the courage to stand up and make it stop?
Kmareka.com 
And this is in a corporate featherbedding environment where taxes on corporations are lower than ever, as reported by Citizens for Tax Justice in the report linked below. You can see from the graph in the report that we have been trending in this direction for some time. But the question is, how long and how far can we afford to keep going in this direction before corporations become the monarchs (tyrants?) who own everything and we the people become indigent and powerless. Is this all for the purpose of propping up Wall Street?
http://www.ctj.org/html/corp0302.htm
This report from 2004 provides more recent information on the corporate tax freeloading going on under the Bush administration.
Click to access corpfed04pr.pdf
Welcome to the wonderful world of corporate welfare. In the last couple of months, Kevin Drum had a post talking about how the enforcement arm of the IRS is focusing on auditing people who claim the EITC, rather than corporate or high-end taxpayers. I mean, that couple of grand that someone at the low end isn’t paying is important, but what’s a few billion among friends?
It’s like if you steal $50 from a convenience store, you’re a criminal. If you steal $50 Million, you’re a CEO who’s “just doing business.”
To be fair, this is not new; Pres W J Clinton overlooked things like this as well. What is different with the current regime is the scale. This time, the criminals are running the show. Remember “Kenny Boy” Lay, late of Enron, and Jack Abramoff; funny how Bush suddenly doesn’t remember either of these two characters.