Posts Tagged contractors

Finance: 2014 Taxes For Contractors, By CPA Luke Fairfield

It is that time again and Luke Fairfield has put out his yearly newsletter for contractors. This stuff is extremely informative and Luke specializes in all the particulars unique to our industry. For your convenience I will also put this in the Taxes For Contractors page if you need to find it quickly. Check it out. -matt

 

Greetings!

For all you ex-pats, foreign contractors and overseas residents 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 2014 is almost over. 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 2014:
1) Please visit our website at www.fairfieldhughes.com. The website includes a learning center with answers to frequently asked questions. We hope you find it to be an excellent resource.
2) Our in house attorney Zac Silides can assist with the preparation, revision or updating of a trust or will and can also assist with other business related legal needs such as the creation of new business entities. Fees for these services are very reasonable based on a comparison to other options.
3) Information update related to IRS audits of the foreign income exclusion:
a. It is critically important that you retain copies of your Diplomatic passport and regular passport, overseas orders, LOAs, overseas expense receipts, VISAs and anything else that can prove you were overseas in a combat zone. Keep these for at least 5 years. Do not turn in your passports without making a scanned, color copy of them.
b. Should they choose to do so under audit, the IRS now has the ability to obtain an entry report from CBP and Homeland Security to verify your time in the US.
c. If you are claiming the exclusion under the physical presence test (330 day rule), some IRS offices are now requiring that your “abode” be outside the US to qualify. Unfortunately this term is not defined in the tax code and the IRS is using some very old court case ruling to say that it is where you maintain your social and economic ties. For those of you with family in the US, this can raise an issue.
d. In short, the foreign income exclusion has become a riskier claim as the IRS does not issue specific enough guidelines on many foreign income exclusion issues. We do not know with any degree of certainty how any audit will conclude as results vary widely by auditor.
4) FATCA. The IRS has enacted many regulations regarding foreign bank accounts and foreign financial instruments. If you have a foreign bank account with a value in excess of $10k or foreign financial holdings in excess of $50k, you may have a filing requirement to be compliant and avoid possible penalties.
5) Afghanistan Tax.
a. In 2014 Aegis was withholding a tax on income earned in Afghanistan by foreign personnel. Several other companies withhold Afghanistan tax on the employee’s behalf as well. If you are aware of foreign tax being withheld, please inform us of this fact so we can ensure you get proper credit.
b. Triple Canopy and Global withhold Iraq tax on income earned in Iraq.
c. Tax paid to a foreign country can be claimed as a credit on your US tax return (Form 1116).
d. The credit can be combined with the foreign income exclusion if you qualify but the foreign tax credit is partially reduced when both are used, making this a complex calculation.
6) Indonesian Tax. Triple Canopy employees in Indonesia present for more than 183 days have a whole new set of issues to be aware of.
a. You are currently having something called “Hypo” or hypothetical tax withheld from your paycheck. This amount will cover your US and Indonesian tax obligation in most cases.
b. TC has provided a description of how your tax obligation to each country will be calculated and handled but it is not easy reading and is complex as it varies by situation.
c. The CPA firm KPMG has been retained to prepare both your Indonesian and US returns. If you plan to use this service, I am happy to look over your returns before they are filed to make sure you received all the benefits available to you. KPMG is a huge worldwide firm who may not be overly familiar with the contract security work profession. Secondly, they will not be as responsive to each of you and your individual questions which concerns me as I have always made a point of getting each of you the answers needed immediately.

Based on the most common questions I was asked last year, let me briefly cover the points most relevant to your situation. The following is a rundown of how your tax situation differs from someone working in the states.

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Cool Stuff: Shadow Warriors Project

Now this is some cool stuff. Recently, a book came out that detailed the security contractor role during the Benghazi attack in 2012 . An incident where four Americans were killed–to include the death of a US Ambassador. The book is called 13 Hours: The Inside Account of What Really Happened In Benghazi. The authors of this book are the actual guys involved in the battle and boy do they have a story to tell. It is a story of security contractors saving lives and dealing with a really bad situation. It is also about what happens after the battle when everyone comes home, which is the part of contracting that does not get much attention. I would not be surprised if a movie came out about this.

But what is really awesome about their story is that one of the authors of this book and participant in the battle named Mark Geist, started an association that all contractors can really get behind and support. Here is a snippet from their web site and organization called Shadow Warriors Project. I also like that his wife is involved, because she represents the sacrifice that families make in this business.

Mark and Krystal Geist, the founders of Shadow Warriors Project have committed their lives to benefitting American people. Mark served our country in the Marine Corp for 12 years and continued on to serve the American people as a Special Operative Contractor where he worked in the most dangerous places on the globe. Mark returned home wounded and broken, leaving the pieces of their lives scattered. After a full recovery, Mark and Krystal are back at what they do best, helping Americans, in their efforts with the Shadow Warriors Project.
Letter from the founders:
Our goal with the Shadow Warriors Project is to create a better everyday life for as many American contractors and their families as possible. We decided to start SWP when Mark returned home from an incredibly dangerous operation. He was hurt both mentally and physically and we wished there was a system that could have helped us repair.
After having almost lost my life and going through almost two years of surgeries and rehabilitation my family and I have found that there is limited short term and virtually no long term support system in place for the contractor.
We can do better, we must do better for those that choose to continue serving our beloved country and in doing so become injured or killed in that service. We want the contractor and his family to not have to worry, should the unthinkable occur.
We thank you for your interest and hope that you will join forces with us to give American contractors a more fruitful life.
Sincerely,
Mark & Krystal Geist

Outstanding, and I really hope this takes off, hence why I am promoting it here on the blog. This is a group started by a wounded security contractor, and focused on taking care of wounded contractors and their families. Or helping the families of those contractors killed in the war.

The other thing to mention here is that there are very few groups dedicated to helping the contractor and his family when injuries or deaths happen. TAPS is another group that will help contractors. Other groups like Wounded Warriors Project will not help contractors and their families, which is disappointing to say the least, but that is their thing. Something to think about if you are looking for a group to donate time or money too, that helps contractors and their families specifically. -Matt

Website for Shadow Warriors Project here.

Facebook Page for Shadow Warriors Project here.

Mark Geist bio here.

 

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Highly recommend watching this documentary on what these men had to say. Mark Geist discusses his injuries and the impact on his family was mentioned as well.

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Industry Talk: FBO–Security Assistance Mentors And Advisors Services In Iraq

This just popped up on my radar screen about Iraq. Of course things have really gotten bad in Iraq with the advance of IS/ISIL/ISIS/Daash and Iraq is having a heck of a time stopping them. Of course this is of grave concern to those that have an interest in a stable Iraq or want the ISIS threat to be stopped.

What is significant here is that contractors are a way to get more ‘boots on the ground’, when politically it is very difficult to do so. Especially when President Obama made promises to the world that we will ‘not’ have soldiers fighting in Iraq, nor will we have ‘boots on the ground’. He also made campaign promises that the US will have nothing to do with Iraq and really trumped up his achievement of pulling all the troops out back in 2011…Well, I guess plans change? lol

At this time, there are several hundred military advisors on the ground, and that number just keeps going up as the situation gets more dire in Iraq. But this also counters the politics of this administration’s views on Iraq involvement. So how do you stop the bleeding in Iraq, but still hold to your promise of not getting involved in Iraq? Enter contractors, the ultimate American Express of contingency operations.

I should also note that contractors are a huge component of security at the Embassy in Baghdad. I have heard estimates thrown around, and given the situation, I would say these are pretty close. Triple Canopy, according to some of my sources, has anywhere from 300 to 350 guys, and SOC has about 200-250 ERT guys. (I am open to any corrections there) That is a pretty substantial force and goes in line with what has been reported over the years in reports. It is also a massive facility, and if ISIS presses the fight closer into the city, those defenses will be tested. That is on top of the current military staffing at the Embassy which was reported to be about 100. As for DoD or OGA contractors, who knows?…

Now back to this FBO. The submission deadline is August 25th, so I imagine all the companies interested will be jumping all over this one and scrambling to put something together. How much this is worth, who knows? This part was interesting thought.

‘The proposed contract is for a single Firm Fixed Price (FFP) DoD contract with a period of performance of twelve (12) months and two (2) twelve month option periods. Security Assistance Mentors and Advisors (SAMA) services in Iraq’.

We will see how this goes and if any other contracts spin up or requests, I will be on the look out. H/T the Washington Post for picking up on this one. -Matt 

 

A police liaison officer, hired by DynCorp to help build the Iraqi police force, walks among the rubble of a police station in 2005 in Fallujah. Agence France-Presse/Getty Images

 

Security Assistance Mentors and Advisors (SAMA) services in Iraq
Solicitation Number: W560MY-14-R-0004
Agency: Department of the Army
Office: Army Contracting Command
Location: ACC – Rock Island (ACC-RI)
Aug 11, 2014
Solicitation Number: W560MY-14-R-0004
Notice Type: Sources Sought
Synopsis:
Added: Aug 11, 2014 10:54 am
SOURCES SOUGHT to locate interested vendors with the capability of performing Security Assistance Mentors and Advisors (SAMA) services in Iraq. The contractor shall provide advice and assistance to the Office of Security Assistance – Iraq (OSC-I) senior personnel in their mission to support the Government of Iraq (GoI), cognizant of the goals of goals of reducing tensions between Arabs and Kurds, and Sunni and Shias, with key focus on core process and systems which involve, but are not limited to administration, force development, procurement and acquisition, contracting, training management, public affairs, logistics, personnel management, professional development, communications, planning and operations, infrastructure management, intelligence and executive development.
Contract personnel shall assist the military and government personnel assigned to OSC-I in the assessment of MoD, CTS, or MoP processes, policies, and systems and then advising, coaching, mentoring, training, and liaising with MoD, CTS, or MoP officials to improve and refine these processes, policies, and systems. The contractor shall also ensure that training facilitation and the degree of interaction between contractor personnel and Iraqis being trained will conform to evolving local Iraqi requirements as may be agreed upon between the contractor and the Contracting Officer.
MISSION STATEMENT: The Office of Security Assistance – Iraq (OSC-I) has a requirement to provide Security Assistance Mentors and Advisors (SAMA) services to mentor and assist the Ministry of Defense (MoD) and the Iraqi Counter Terrorism Service (CTS) to build processes and institutional capacity within the ministry or bureau in order to place them on the critical path towards Iraqi security self-reliance.
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Medical: New Research Links Dust From Iraq’s Camp Victory To Ill Soldiers

“We biopsied several patients and found titanium in every single one of them,” said Anthony Szema, an assistant professor at Stony Brook School of Medicine who specializes in pulmonology and allergies. “It matched dust that we have collected from Camp Victory” in Iraq.

I wanted to get this information out there for everyone that has served in Iraq. Although I am not sure if the VA will test non-veterans, I would give it a try anyways. At least file a DBA if you have lung issues that you think came from your time in Iraq or even Afghanistan. If the VA is truly interested in finding trends and sources of this illness, it would be advisable for them to include the thousands of contractors who deployed in Iraq during those years. Either way, get yourself checked if think you need it.

Also, for DBA sake they should be testing contractors. The reason for that is they can plan for the coming claims, if it is found out that contractors are reporting lung illnesses. If there is an illness associated with serving in Iraq or Afghanistan, then contractors should absolutely get the same attention in these studies and treatment.

If you have a lung illness and think it was from serving in Iraq or Afghanistan, by all means make a comment below so others can read it. It mentioned that the metal dust found in the soldier’s lungs matched the same dust found at Camp Victory. There were also multiple camps in Iraq and Afghanistan that were burning trash daily. Balad airbase in Iraq burned 240 tons of trash a day!

With that said, this research and reporting reminds me of the Gulf War Illness studies back when I was in the service. That research is still ongoing and they are still trying to determine what caused Gulf War Illness. The article below also lists a registry you can sign up with if you served in the First Gulf War or in the most recent wars in Iraq. Get the world out guys and gals and pass this one around. -Matt

Study on Iraq dust here.

Register with the VA for Gulf War Registry Health Exam here.

Veterans who served in the Gulf during the 1990-1991 Gulf War, Operation Desert Shield, Operation Desert Storm, Operation Iraqi Freedom, or Operation New Dawn are eligible for the Gulf War Registry exam. You do not need to be enrolled in VA health care to take part.

Register with the VA for Airborne Hazards and Burn Pit Registry here.

* Veterans who are eligible for the Gulf War Registry may also join the Airborne Hazards and Open Burn Pit Registry, which includes additional data related to airborne hazards.

 

Burn pit in Balad, Iraq.

New research links Iraq dust to ill soldiers
By Kelly Kennedy
June 2, 2014
Titanium and other metals found in dust at a base in Iraq have been linked to the dust found in six sick soldiers’ lungs, according to a study set to be released Monday.
“We biopsied several patients and found titanium in every single one of them,” said Anthony Szema, an assistant professor at Stony Brook School of Medicine who specializes in pulmonology and allergies. “It matched dust that we have collected from Camp Victory” in Iraq.
The dust is different from dust found elsewhere in that human lungs are unable to dispel it through natural immune-system processes. The Iraq dust comes attached to iron and copper, and it forms polarizable crystals in the lungs, Szema said. The particles — each bit 1/30th the size of a human hair — have sharp edges.
“They’ve inhaled metal,” Szema said. “It’s not a little; it’s a lot.”
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Industry Talk: Two DynCorp Contractors Killed In VBIED Attack In Afghanistan

Rest in peace to the fallen and my heart goes out to the friends and family of both men. Very tragic that these guys were going home when this happened. Michael was on his way to getting married this Valentines day.

A VBIED is what killed the two men, and no word on the condition of everyone else that was wounded. -Matt

 

Michael Hughes.

 

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Paul Goins.

 

Two Killed in Kabul, Afghanistan
February 10, 2014
On February 10, 2014, two DynCorp International personnel working on the Combined Security Transition Command – Afghanistan (CSTC-A) program were tragically killed in an explosion near Kabul, Afghanistan.
Paul Goins, 62, of Crosby, Texas, joined DI in February 2013. A veteran of the U.S. Marine Corps, Mr. Goins had more than 35 years of experience in the correctional and compliance fields, working with the Department of Justice, the Federal Bureau of Prisons, and in the private sector. His professional contributions were made at home in the United States, and abroad in Iraq and Afghanistan, where he worked to share his knowledge with developing countries.
Michael Hughes, 38, of Washington, Montana and Nevada, joined the DI team in Afghanistan in November 2010. Having worked for several years with the Department of Corrections in Washington State, Mr. Hughes’ areas of expertise included training, emergency management, incident command, as well as hostage and crisis negotiations.
DynCorp International chairman and chief executive officer Steve Gaffney commented, “The world lost two heroes in this attack. They volunteered to travel to places they had never been, to help people they had never met. I ask that you please keep them, along with their families, loved ones, and colleagues who continue to support the mission, in your thoughts and prayers.”

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Weapons: Oh, The Weapons Contractors Use…

This is a fun one. On Facebook I posted a TOTD or Thought Of The Day on what types of weapons contractors have used in the past on contracts. What I got was an incredible amount of feedback on this and it was really fun to see what popped up. Here is the TOTD I posted:

TOTD: Contractor Weapons. I think this would be a fun one. I would be interested in all the various weapon types that guys have seen issued as contractors, or had to use as part of their contract. Or stuff that you saw or heard other contractors use. Everyone hears about AK’s, M-4/ARs, and Glocks, but what are the other rifles and pistols seen issued. Or even the heavier weapons used for contracts. This should be a fun one and I will probably make a post out of it on the blog.

I have mentioned in the past that Facebook has been incredibly useful for interacting with the contractor community. The amount of feedback and interaction is amazing and very useful. I am also able to share more ideas in a more efficient manner there, which also helps to get more ideas in return.

So back to contractor weapons. Guys posted pictures and everything, and it was cool to see any trends in what we are using out there. Obviously AK -47’s and M-4/AR-15 variants are the top primary weapons. But the various types of other weapons issued and their histories are very interesting. Some are just recaptured weapons that were given to contractors by outgoing military units in the various AO’s, or some are weapons the companies were able to ship into that country. Others were bought in gun markets in the region, and it is fascinating to see what contractors we able to get a hold of.

What I will do below is list every gun mentioned and I recommend going to the post on FB to see the various stories behind these weapons. I did notice that the G-3 was mentioned quite a bit. I got to play around with one in Iraq, but didn’t use it for work. In the photo below, Patrick brought up a heavily modified G 3 that I thought was cool.

The other thing to point out is how many copies of weapons were mentioned. Stuff that was either reproduced by Iraqi factories or stuff that was made in the weapon making villages of Pakistan. Lots of junky weapons that fell apart or barely worked, but were cheap and helped to stand up a contract. It is a huge problem in the industry, and companies continue to outfit contracts with junky weapons and equipment, all because of money or because they do not have the connections to get the good stuff into that war zone. That is the one thing that I continue to see and hear from contractors out there, and I have experienced the same, and that companies are horrible at providing good weapons or equipment. It’s why guys become good at fixing weapons or why folks prefer to bring their own kit–because the companies are horrible at this stuff.

Back to the list. There is also the mention of heavy weapons used, or the use of explosives. Stuff that you would not associate with contracting, but was certainly used at one time or another by contractors in Iraq or Afghanistan. In the early days of Iraq, you saw everything. Now, not so much because regulations and contracts have become very specific as to what can be carried. I saw that change during the 2006 to 2008 time frame, and especially in Iraq. But there are contracts that are out of sight or out of control of the Big Military, and you continue to see the heavy stuff come up on contracts.  So here is the list, and feel free to add in the comments section stuff that you used on contracts. -Matt

 

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This is a PDW Patrick McAleer made in 2007, out of an Iranian G3, in Iraq. Photo Credit Patrick McAleer.

 

Pistols

Glock 19
Glock 17
HS 2000
Caracal F
M 9
SIG P226
Makarov
Turkish Kanuni
Walther P 38
Iraqi Berretta
Browning Hi Power
Walther P 99
CZ 75
.455 Webley
Smith and Wesson Sigma
Norinco NP 22 (Sig 226 copy)
FN P35
CZ 70
Tariq
Zastava EZ9
Ruger P95
.38 Colt Diamondback
Colt 1911
.455 Colt Eley
Tokarov

Rifles
M 16 A2
AK 47
AR 15
M 4
FN FAL
Colt 722
G 3
G 36
Type 56
K 98
Krag
British SMLE
Sturmgewehr 44
SVD
Saiga M 3
Benelli Argo
Remington R 25
Remington 700
Browning BAR
Mosin Nagant
FPK Dragunov
AR 10
Ruger Scout Rifle in .308
AMD 65
HK MR 308
FN FAL para
VZ 58
AR 18
HK 416
East German MPi KM 72
SIG 550

Shotguns

NOR 982
Remington 870
Italian double barrel

Submachine Guns

Swedish K
MP 5
Scorpion
Uzi
Sterling
Krinkov
PPSH 41
Beretta M 12
Beretta PM 12S
Thompson

Machine Guns

MG 42
FN Minimi Para SAW
FN M-249 SAW
M-240/MAG 58
PKM
M 60
RPK
MG 3
RPD
VZ 59

Grenade Launchers

M 79
UBGL 25
HK 69
M 203
M 320/AG 36

Mortars, Grenades and Mines

M 67
RGD 5
M 18 Claymore
Stun
Tear Gas/CS
Improvised Claymores For Defense
Mortars for flares

Rocket Launchers

AT 4
RPG 7

Heavy Machine Guns

M 2
DsHK

Automatic Grenade Launchers

MK 19
AGS 17

Misc.

Crossbows
Regular Archery Bows
Kitchen Knives
ASP baton
Slingshot

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