] More than 27,000 defense contractors owe the federal
] government about $3 billion in unpaid taxes as of
] September 2002, the watchdog agency concluded in a new
] report, "DoD Contractors Abuse the Federal Tax System
] with Little Consequences (GAO-04-95)."

Ryan said some contractors stay in existence just for a short time to get a government contract, and then dissolve and change names to get another contract. He said one contractor used magnetic signs on trucks so it could quickly change names.

In some cases, the tax evasion was flagrant. The owner of one contractor with $10 million in unpaid taxes used corporate funds to buy a home in the Caribbean and a luxury boat. Another owner took $1 million from his company to buy a large home and a luxury car.

Ryan: Corruption at its finest. Sound familiar to anyone?

Government Executive Magazine - 2/12/04 Defense contractors owe billions in unpaid federal taxes