The security company Blackwater is used to being in the crosshairs in Iraq when it guards American diplomats in a war zone, but the private military contractor is increasingly finding itself targeted on its home turf.

On Monday, the head of the congressional probe into Blackwater asked three federal agencies -- the Internal Revenue Service, the Department of Labor and the Small Business Administration -- to investigate the Moyock, N.C.-based company.

U.S. Rep. Henry Waxman, a California Democrat, said he has uncovered evidence that Blackwater evaded tens of millions of dollars in taxes and improperly won $144 million in contracts set aside for small businesses.

Blackwater's director of public affairs, Anne E. Tyrrell, called Waxman's claims "completely without merit."

Waxman repeated the complaint he first aired in October: that Blackwater has failed to pay or withhold $50 million in federal taxes by treating its security guards as independent contractors instead of employees. Since then, Waxman said, his investigators have reviewed 20,000 documents and interviewed former Blackwater personnel and officials at the State Department, which hired Blackwater to protect its diplomats in Iraq and worldwide.

Employees split payroll taxes with the companies they work for; companies withhold Medicare and Social Security taxes from a paycheck and pay the federal government a matching amount. Independent contractors must pay all the taxes themselves.

The independent contractor designation also helped Blackwater win at least $144 million in contracts set aside for small businesses. If Blackwater counted its 1,000-plus overseas personnel as employees, it would not be eligible for small business designation, Waxman said.

"Despite the fact that Blackwater is one of the largest private military contractors, receiving nearly $1.25 billion in federal contracts since 2000, Blackwater has sought and received special preferences normally reserved for small business," Waxman said in his report.

One of Blackwater's former lawyers has argued that Blackwater security guards are employees, not contractors.

Fred Fielding is now White House counsel for President Bush, but in 2005 he represented Blackwater in a lawsuit filed by the families of four Blackwater workers killed in a massacre in Fallujah in 2004.

Fielding wrote in a legal memo filed in federal court in Raleigh that the guards were not independent contractors; they were "employees as a matter of law." Fielding said this "conclusion was inescapable." As employees, workers' compensation would be their only remedy.

But Blackwater also told the U.S. Department of Labor it did not have to comply with federal audits of affirmative action plans because its security guards are contractors, not employees.

"When the issue is whether Blackwater can be held liable for the wrongful death of Blackwater guards, Blackwater argues that the guards are 'employees' and can recover only through the workers compensation system," Waxman wrote. "But when the issue is whether Blackwater must pay or withhold Social Security, Medicaid or other taxes for the guards, whether Blackwater is eligible for small business preferences in contracting, or whether Blackwater must comply with anti-discrimination rules, Blackwater calls these same guards 'independent contractors.' "

Tyrrell, of Blackwater, said the company correctly classified the workers.

"Blackwater's classification of its personnel is accurate, and Blackwater has always been forthcoming about this aspect of its business with its customer, the U.S. government," she said in a statement. "Blackwater looks forward to continuing its cooperation with all inquiries that may result from these letters."