Unemployment Taxes Evaded
Despite the recent passage of a federal law meant to curb corporate tax evasion, unscrupulous employers are continuing to evade millions of dollars in state unemployment taxes. Companies eager to cut unemployment insurance costs have found new loopholes following closure of the old ones, and many states have been reluctant to step in in the face of opposition from employers. In addition, more employers are "misclassifying" workers as independent contractors instead of employees to avoid paying benefits and wages.
See "Unemployment Taxes Evaded", Albert B. Crenshaw, The Washington Post, June 14, 2005