April 17, 2009 4:01 PM
- Text
13 Bailed Out Firms Owe Back Taxes
(CBS/AP)
At least 13 firms receiving billions of dollars in bailout money owe a total of more than $220 million in unpaid federal taxes, a key lawmaker said Thursday.
Rep. John Lewis, chairman of a House subcommittee overseeing the federal bailout, said two firms owe more than $100 million apiece.
"This is shameful. It is a disgrace," said Lewis, D-Ga. "We are going to get to the bottom of what is going on here."
The House Ways and Means subcommittee on oversight discovered the unpaid taxes in a review of tax records from 23 of the firms receiving the most money, Lewis said as he opened a hearing on the issue.
The committee said it could not legally release the names of those companies owing taxes. It said one recipient had almost $113 million in unpaid federal income taxes from 2005 and 2006. A second recipient owed almost $102 million dating to before 2004. Another was behind $1.1 million in federal income taxes and $223,000 in federal employment taxes.
"If we looked at all 470 recipients, how much would they owe?" Lewis asked.
Banks and other firms receiving federal money were required to sign contracts stating they had no unpaid taxes, Lewis said. But he said the Treasury Department did not ask them to turn over their tax records.
Neil Barofsky, special inspector general for the Troubled Asset Relief Program, told the hearing that if an executive signed a contract knowing that information about unpaid taxes was false, "that would potentially be a crime." He said his office will look to see if crimes were committed.
People will ask, said Rep. Artur Davis, D-Tenn., why there are "large companies getting taxpayer dollars, making false representations, and we can't even name them, much less make them pay the money back, much less prosecute them."
Davis continued: "Will they get their day on a billboard, hopefully?"
"Absolutely," said Barofsky. If someone lied, he said. "They need to be prosecuted."
The revelation is sure to spark outrage on Capitol Hill, where the House is expected to vote Thursday on a bill that would impose steep taxes on employee bonuses at firms that have received bailout money.
"I think we're on the path to where at least most of the money is going to be given back," Michael Santoli, associate editor at Barron's, told CBS' The Early Show. "I do think this crescendo of outrage has basically had its effect in that regard."
To date, the Troubled Asset Relief Program, or TARP, has paid out more than $300 billion to private companies, with billions more on the way.
Rep. John Lewis, chairman of a House subcommittee overseeing the federal bailout, said two firms owe more than $100 million apiece.
"This is shameful. It is a disgrace," said Lewis, D-Ga. "We are going to get to the bottom of what is going on here."
The House Ways and Means subcommittee on oversight discovered the unpaid taxes in a review of tax records from 23 of the firms receiving the most money, Lewis said as he opened a hearing on the issue.
The committee said it could not legally release the names of those companies owing taxes. It said one recipient had almost $113 million in unpaid federal income taxes from 2005 and 2006. A second recipient owed almost $102 million dating to before 2004. Another was behind $1.1 million in federal income taxes and $223,000 in federal employment taxes.
"If we looked at all 470 recipients, how much would they owe?" Lewis asked.
Banks and other firms receiving federal money were required to sign contracts stating they had no unpaid taxes, Lewis said. But he said the Treasury Department did not ask them to turn over their tax records.
Neil Barofsky, special inspector general for the Troubled Asset Relief Program, told the hearing that if an executive signed a contract knowing that information about unpaid taxes was false, "that would potentially be a crime." He said his office will look to see if crimes were committed.
People will ask, said Rep. Artur Davis, D-Tenn., why there are "large companies getting taxpayer dollars, making false representations, and we can't even name them, much less make them pay the money back, much less prosecute them."
Davis continued: "Will they get their day on a billboard, hopefully?"
"Absolutely," said Barofsky. If someone lied, he said. "They need to be prosecuted."
The revelation is sure to spark outrage on Capitol Hill, where the House is expected to vote Thursday on a bill that would impose steep taxes on employee bonuses at firms that have received bailout money.
"I think we're on the path to where at least most of the money is going to be given back," Michael Santoli, associate editor at Barron's, told CBS' The Early Show. "I do think this crescendo of outrage has basically had its effect in that regard."
To date, the Troubled Asset Relief Program, or TARP, has paid out more than $300 billion to private companies, with billions more on the way.
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