1986 tax law change was source of anger

Andrew Joseph Stack III, the man linked to a plane that crashed Thursday into a Northwest Austin building that included IRS offices, was vehemently opposed to the U.S. tax system.

In his online rant, the software engineer particularly railed against a 1986 tax reform that redefined the status of some highly skilled technology industry contract workers.

In the posting, Stack said he had been a contract software engineer.

"They could only have been more blunt if they would have came out and directly declared me a criminal and non-citizen slave," Stack wrote about the tax law change.

The change required companies that used high-tech contractors to withhold part of their salaries for income tax purposes, said Calvin Johnson, a law professor at the University of Texas who specializes in federal tax laws.

Previously, those workers did not have tax money withheld from their paychecks but made quarterly payments on their own based on their estimated income and could take deductions for items such as home offices that significantly reduced their taxes.

The loss of those extra deductions could have left someone owing money to the IRS, said Joseph Brophy, a Dallas certified public accountant.

Congress passed the 1986 law in an attempt to lower tax rates, Johnson said.

Lawmakers were upset at "big rich Silicon Valley people avoiding the withholding system, so... they said that high-tech engineers should be judged by normal rules," he said.

It appeared Stack was looking for a way out of the withholding system, Johnson said.

"If Stack had intended to pay tax on the quarterly payment system, he would have had no advantage from getting out of withholding. Indeed, the paperwork burdens go up," Johnson said. "I suspect he therefore had no intent to pay any tax, even when an independent contractor."

bgaar@statesman.com; 912-5932