SitNews - Stories in the News - Ketchikan, Alaska


Open Letter: Alaska Marine Highway System
By David G. Hanger


February 23, 2009

Dear Governor Palin:

A substantial percentage of the employees of the Alaska Marine Highway System have been involved for the better part of ten years in a collective and systematic income tax fraud that has cost the U.S. Treasury millions of dollars in unpaid tax revenues. These employees had every reason to know that what they were doing was wrong, and they did it anyway. Rather than respecting the expertise and integrity of any number of Alaska accountants who told them the simple truth, they crawled into bed with an individual named Martin A. Kapp, a liar and crook who resides in southern California, who professed "magic" knowledge known only to him that permitted him to deduct on Federal income tax returns the cost of meals provided on board and paid for by the state of Alaska. Repeating that, expenses incurred and paid for by the state of Alaska were deducted on the individual tax returns of state employees.

Firing all those involved will probably leave you without enough employees. Martin A. Kapp's fraud is a massive mult-million dollar tax fraud that he perpetrated on behalf of AMHS employees. Federal law mandates that because these individual taxpayers had prior knowledge and reason to believe that what they were doing was wrong they are equally guilty of this fraud. Instead of tax returns being opened and audited by the IRS to the statutory limit of three years, all ten years can be opened and additional taxes, penalties, and interest assessed for all those years.

Clearly, these state employees do not have the judgment necessary to understand that biting the hand that feeds them is not acceptable. Furthermore, why do state employees consider themselves so special that they get to lie and cheat, while we have to pay the difference?

In the meantime for ten years there have been very few AMHS employees using Alaska accountants. Alaska CPAs, licensed and governed by the standards of the state boards of accountancy, and enrolled agents (EAs), licensed by the Federal government to practice before the IRS, have been degraded and impoverished for being honest and eminently competent. Based on the number of AMHS accounts I had before this nonsense began, I have directly lost in fees to the criminal element of this society several hundred thousand dollars, plus the indeterminate amount lost because of bad publicity on the part of state employees who have been advising their friends, cohorts, and associates for a decade that Alaska accountants are a bunch of dummies. I have talked with other accountants, and many have experienced similar volume reductions.

The loss in revenue to the state economy because your employees think Alaska accountants are not "magical" enough is in the millions of dollars. A comprehensive re-education campaign is in order, including instruction on what professional licensing at the state and/or Federal level means, and that when Alaska accountants universally say something is wrong, it is not because they all drank from the same kool-aid bucket.

It is also blatantly obvious that these Alaska state employees are contemptuous of the law and have in fact already conspired to defraud one of the sources of their own payroll, and have in the meantime conspired systematically to degrade and shun any individual or group of individuals who has advised them to change their conduct. If it is not already specifically law, it is necessary now and henceforth that state employees who cheat on their taxes be fired immediately for such offense. Apparently, there are a lot of very special people currently working for state government; a different set of rules applies to them.

Please see to correcting this. Thank-you.


David G. Hanger, EA, MBA
Ketchikan, AK


Received February 13, 2009 - Published February 23, 2009


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