Businesses owe $58 billion in tax withholdings

[July 29, 2008]  WASHINGTON (AP) -- Congressional investigators say businesses have failed to pay the IRS some $58 billion over the past decade in taxes they were supposed to have withheld from their employees' paychecks and forwarded to the government.

The Government Accountability Office says more than one and a half million businesses owed the supposedly withheld income, Social Security and Medicare taxes as of the end of September last year. Because the taxes weren't paid, the government had to dip into its general fund to cover shortfalls in Social Security and Medicare.

The GAO report faults the Internal Revenue Service for relying too much on voluntary compliance in the past, even with the worst payroll tax offenders.

[Associated Press; By JIM ABRAMS]

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