IRS offering deal on tax shelters
Washington The Internal Revenue Service is offering more than 4,000 taxpayers who have participated in 21 tax shelters the agency regards as abusive a reduction in potential penalties if they come in, confess, and pay all their taxes and interest, IRS Commissioner Mark Everson said Thursday.
The “initiative,” as the IRS calls it – “this is not an amnesty,” Everson said – follows similar programs for shelters such as “Son of BOSS” and executive stock options, in which the agency collected millions of dollars from hundreds of taxpayers.
Everson said he could not predict how much the new program would bring in, but he said the amount of revenue that has gone uncollected as a result of the shelters “clearly … runs into the billions of dollars.”
The 21 shelters range from highly sophisticated deals involving foreign currency trading by wealthy individuals to more basic attempts to underpay taxes by small businesses that double-count health insurance costs or parking benefits for workers. Taxpayers have until Jan. 23 to come forward.
Engineer accused of selling stealth secrets
Honolulu An engineer who calls himself the father of the technology that protects the B-2 stealth bomber from heat-seeking missiles has been arrested and accused of selling U.S. military secrets involving the aircraft to a foreign country, the FBI said.
Noshir S. Gowadia, 61, of Haiku was arrested Wednesday.
According to the FBI, Gowadia in 2002 faxed a document detailing infrared technology classified top secret by the Air Force to a foreign official. He also provided classified information to two other countries, the FBI said. The government would not identify the countries or disclose how much he allegedly received.
Gowadia was an engineer with Northrop Grumman Corp. from 1968 to 1986 and had helped design parts of the B-2’s propulsion system that make the bomber difficult to be seen by enemy missiles. The technology remains highly classified.
Medicaid cuts survive in House committee
Washington A proposal to curb Medicaid spending by about $11 billion by the end of the decade withstood a challenge in a key House committee Thursday as lawmakers worked on a plan to slow the automatic growth of the program, which provides health care to the poor and disabled.
Democrats, saying Republicans were trying to cut the deficit on the backs of poor, lost a vote to block the plan. Energy and Commerce Committee Republicans countered that they were making only modest trims – about 1 percent – in a program estimated to cost $1.1 trillion over the same period.
The Medicaid measure is to be folded into a sprawling budget bill to implement Republican plans that would, for the first time in eight years, take on the automatic growth of federal programs such as food stamps, farm subsidies and student loan subsidies. The plan also would raise revenue by auctioning television airwaves to wireless companies and leasing parts of the Arctic National Wildlife Refuge for oil drilling.
The Medicaid plan would impose new co-payments on Medicaid beneficiaries and would allow states to scale back coverage. It also would tighten rules designed to limit the ability of elderly people to shed assets in order to qualify for nursing home care, lower pharmacy profit margins and encourage pharmacies to issue generic drugs.