Australia: IRS is aggressively targeting foreign vessel owners and US companies for Outer Continental Shelf oil & gas activities

Shipping newsletter - Legalseas
Shipping newsletter - Legalseas

Introduction

The IRS continues to diligently pursue the foreign companies and the US companies that hire them to perform offshore services for the oil and gas industry on the Outer Continental Shelf in the Gulf of Mexico. The IRS is using sophisticated monitoring and vessel tracking systems, such as Sea-Web, Vessel Tracking Services, and satellites, to track the daily movement of certain vessels. The IRS contends that these foreign companies and their foreign workers have US source income and should have filed US income and employment tax returns and paid US taxes on amounts earned from these offshore activities. Moreover, the IRS contends that the US companies that hired and paid these foreign companies should have withheld taxes out of the amounts paid. The IRS's Industry Directives on this initiative can be found below.

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