ENFORCEMENT
IRS will crack down on firms owning foreign vessels that dodge U.S. taxes. In a memo to field agents, IRS says the problem involves foreign contractors that work for U.S. oil and gas companies in the Outer Continental Shelf.
Typically, they perform drilling or salvage work, or transport supplies between U.S. ports and oil rigs. Since those waters are U.S. territory, vessel owners are liable for tax on income derived there. A foreign vessel owner claiming a treaty-based exemption from U.S. tax still is required to file a U.S. income tax return and attach Form 8833, disclosing its claim of exemption. Since foreign businesses have to register to work in the Outer Continental Shelf, the Service will review that list for audit targets.
IRS will crack down on firms owning foreign vessels that dodge U.S. taxes. In a memo to field agents, IRS says the problem involves foreign contractors that work for U.S. oil and gas companies in the Outer Continental Shelf.
Typically, they perform drilling or salvage work, or transport supplies between U.S. ports and oil rigs. Since those waters are U.S. territory, vessel owners are liable for tax on income derived there. A foreign vessel owner claiming a treaty-based exemption from U.S. tax still is required to file a U.S. income tax return and attach Form 8833, disclosing its claim of exemption. Since foreign businesses have to register to work in the Outer Continental Shelf, the Service will review that list for audit targets.
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