Posts Tagged audit

Cool Stuff: Taxes For Contractors 2012

Here it is folks. Every year Luke Fairfield puts out these excellent letters that detail all the specific tax issues related to our profession for that tax year. So read through it and contact him or his partner Chris if you have any questions.

The stuff to watch out for this year are audits. Like Luke mentioned below, I have heard of more and more audits happening in our industry. The government is looking for any ‘loose change’ and taxes owed, so it pays to get prepared with this stuff. If you do get audited, contact Luke immediately and let him work the problem. I will keep this letter posted in my Taxes For Contractors page up top in the blue bar. –Matt



For all you ex-teams, ex-pats, ex special forces, security contractors and operators out there I hope this letter finds you well. In an attempt to keep you current with your tax filings I am sending out this letter as a year-end reminder that 2012 is almost over. There are some very important changes this year that could impact many of you as it relates to the IRS’s new audit interest in the foreign income exclusion. If you read nothing else, read the section below updating you on this topic. As always feel free to pass this email on to anyone in your situation who could use the help or anyone that I missed on this email. As always, I will do my best to minimize your tax bill and provide relevant advice for your situation.

Important Updates for 2012:
1) Audits on the foreign income exclusion have greatly increased. If you worked for Blackwater in 2009 chances are you were audited. Count yourself lucky if you were not as you are in the minority. If you have not heard of a teammate or fellow employee who has been through an audit I would be surprised. These audits have spread from ex-Blackwater employees to nearly anyone filing for the foreign income exclusion. As a result, I would recommend being more cautious in claiming the Foreign Income Exclusion in 2012. After a year of dealing with these audits, the below points stand out as noteworthy and important.
a.It is EXTREMELY important that you contact me in the event that you receive an audit notice. Do not make contact with the auditor for the same reason that you do not file your own tax return. Leave it to professionals with experience dealing with these situations; the results will almost certainly be better with less risk to you.
b.If you filed for the foreign income exclusion under the bona fide residency method and your location was Iraq or Afghanistan, under audit, the IRS will likely take the position that you were not a bona fide resident for tax purposes and will disallow the claim. A residency VISA from your host country is not enough to qualify. Yes, I am quite aware that everyone around you tells you they file as bona fide residents and have never had a problem. To that I can only ask if you have ever been fishing and if you have, did you catch all the fish?

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Afghanistan: US Lawmakers Offended By The Cost Of The APPF

Preliminary findings of the audit by the Acting Special Inspector General for Afghanistan Reconstruction, Steven Trent, said security for USAID projects may cost as much as 46 percent more than it does now under the new system mandated by Karzai, adding as much as $55.2 million to USAID’s bill in the first year of the transition.

And here comes the sticker shock. I mean really, what did you folks think was going to happen with this idiotic idea? A corrupt government demanding a 20 percent profit charge for the cost of their state run guard force? lol A guard force that will end up costing us 46 percent more than it does now?  Does this guard force give back rubs and provide champagne with this contract? pfffft

Well at least there are some elected officials that are questioning this thing. Which is great, and especially if 16 of this year’s coalition deaths were green on blue–afghans killing troops.  We will see… –Matt


US lawmakers offended by spike in Afghan guards’ cost
March 29, 2012
By Susan Cornwell
U.S. lawmakers were disturbed on Thursday by a government auditor’s prediction that security costs will spike for U.S. development projects in Afghanistan as they are forced to switch from private contractors to Afghan government-provided security.
Representative John Tierney suggested the United States might want to just walk away from aid projects in Afghanistan rather than pay the additional costs, including a 20-percent “profit” charge, under the new policy mandated by Afghan President Hamid Karzai. Tierney said there were already too many questions about “where the money is going” in Afghanistan.
“There’s always one last option. Just don’t do it,” Tierney, a Democrat, told a senior official of the U.S. Agency for International Development (USAID), Alex Thier, in a hearing on Capitol Hill.
“Personally, I’m offended … I think we are being pushed around,” said Representative Jason Chaffetz, a Republican. “We’re paying for everything, we should be able to provide the security.”
The hearing also aired disputes among U.S. agencies over whether security costs will indeed go up, and whether that will force closure of some U.S.-funded development projects.

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