Defense Base Act Compensation Blog

The Modern Day DBA Casualty

Tax and DBA Insurance Fraud, Misrepresenting Employee’s as Contractors

Posted by defensebaseactcomp on February 24, 2011

Some Contract Companies avoid paying Medicare and Social Security Taxes on their employees by classifying them as independent contractors or consultants.  The IRS considers this to be Fraud.

These same companies claim these same independent contractors/consultants to be employee’s for the purposes of acquiring mandated Defense Base Act Worker’s Compensation Insurance.  Even going so far as to have workers sign and back date employee contracts after they have been injured so they will be covered.

See more on Misclassification of Employee’s as Contractors at Overseas Contractors Tax Information where you will also find a link to the IRS Form SS-8

Following is a recent SS-8 Determination which confirms the Misclassification and opens up the company to an investigation of Tax and Insurance Fraud and US Labor Law Violations.

3 Responses to “Tax and DBA Insurance Fraud, Misrepresenting Employee’s as Contractors”

  1. Superman said

    Its about time! our own government in this case, the IRS, scolds these firms. In this case Blackwater and from what I read has been informed these guys are not 1099 Independent Contractors prior to this letter and Blackwater continues this fraud. Wow. OK where is the Justice Department? Why are they not stepping in? I can answer that… Blackwater is in bed with the CIA.

    The term contractor is widely use but clearly incorrect. Wait til this form (SS-8) gets filed against the Government itself. Think about it. These guys did not work for these firms they worked for the government, who gave them orders, made them adhere to the governments standards, issued them Diplomatic Passports. Ultimately you will see the US Govt has attempted to hide the true identity of these folks and who they truly worked for. Now that they are not taking care of these guys when they return home injured… the truth is going to come out, ultimately blowing up in the governments face.

  2. […] a determination from the IRS that Blackwater misclassified him as an independent contractor.  “The IRS already  determined in the case of one of my clients that he should have been classified as an employee,“ said […]

  3. […] determination from the IRS that Blackwater misclassified him as an independent contractor.  “The IRS already  determined in the case of one of my clients that he should have been classified as an employee,“ said […]

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