Overseas Civilian Contractors

News and issues relating to Civilian Contractors working Overseas

KBR, Halliburton Won’t Face Trial in Iraq Convoy Driver Deaths, Judge Priscilla R Owen Says

The Defense Base Act’s Exclusive Remedy “A License to Kill”

The Exclusive Remedy was intended to be trade off to keep injured contractors from having litigate with their employers when they are injured.  As it turns out the employers are off the hook and the injured contractors fight for years for medical care and lost wages from private insurance companies, AIG, CNA, ACE

AIG has fought the survivors and families of those killed like they were common criminals for the death, medical, and lost wages that were to be provided “forthwith”.

And no one believes this could happen until it happens to them and their family.

Bloomberg  January 12, 2012

KBR Inc. (KBR) and its former corporate parent, Halliburton Co. (HAL), won’t face a jury on claims they sent unarmed civilian convoy drivers into an Iraqi battle zone in 2004, knowing the workers would be injured or killed, an appeals court ruled.

The U.S. Court of Appeals in New Orleans today ruled the drivers’ claims were blocked by the Defense Base Act, a U.S. law that shields military contractors from lawsuits. The drivers were attacked and injured because of their role in support operations for the U.S. Army, which is covered under that statute, the judges said.

“Coverage of an injury under the DBA precludes an employee from recovering from his employer,” even if the worker claims the company was “substantially certain” the injuries would occur, U.S. Circuit Judge Priscilla R. Owen said in a 30-page ruling by the panel.

KBR, a Houston-based government contractor, was sued in 2005 by the families of seven drivers killed while working inIraq for the largest U.S. military contractor. The company appealed a 2010 lower-court ruling that jurors could weigh the companies’ actions without second-guessing the actions of the Army.

Unarmed Civilians

U.S. District Judge Gray Miller, who presided over the case in Houston federal court, refused to dismiss Halliburton, which spun off KBR as a separate company in 2007. Miller had also ruled that the companies couldn’t name the military as a co-defendant in the lawsuits, so the Army wasn’t required to defend its actions.

The drivers and their families claimed KBR officials fraudulently recruited workers for safe jobs in Iraq and intentionally sent unarmed civilians into a recognized combat zone in April 2004. KBR’s military-supply contract gave company officials the right to refuse assignments deemed too dangerous for civilians, according to the complaints.

KBR and Halliburton argued that they weren’t liable because they couldn’t refuse Army orders to dispatch the fuel convoys under terms of their multibillion-dollar supply contract with the U.S. military. The convoys were attacked at a time when Iraqi insurgents were escalating the fight against U.S. troops that had taken over the country to oust dictator Saddam Hussein.

The case is Fisher v. Halliburton, 10-20202, U.S. Court of Appeals, Fifth Circuit (New Orleans).

January 12, 2012 Posted by | Civilian Contractors, Contractor Casualties, Defense Base Act, Halliburton, KBR, Legal Jurisdictions, Safety and Security Issues | , , , , , , , , , , | 2 Comments

IRS Targets US ExPats

Updates to our ExPat Tax Page

For years companies like Blackwater and Ronco Consulting  have Misrepresented their employees as Consultants or Independent Contractors to the IRS to escape having to pay Social Security and Medicare payroll taxes.

Thank you Blackwater and Ronco Consulting

At the same time these same companies represented these same consultants and Independent Contractors to be employees for the purpose of purchasing the mandated Defense Base Act Worker’s Comp Insurance.  Even going so far as to have contractors sign new backdated employment contracts AFTER they were injured.

Fraudulent activity of this nature has garnered the full attention of the IRS to the Contract Employee much more so than it has the Contract Company.  Blackwater even continued to do this after the IRS busted them.

Bob Powers of Power Tax sends us this and asks that we warn all ExPats to be prepared.

Pursuant to an IRS internal memo Memorandum Number: AM2009-0003

This link IRS  has an important note regarding the definition of a foreign tax home (which is necessary to claim the Sec 911 benefit).

The IRS has been using this in somewhat of a distorted way to deny the FEIE to contractors working in Iraq and Afghanistan,, not only those who have families in the U.S., but also single people who left home, joined the military and then were hired as contractors.

If they did not plan in advance and take all the steps necessary to show that their abode was in a foreign country and not in the U.S. they are disallowing the exclusion.

Many have had inexperienced tax preparers or did their own tax return and the case dragged on so long that they lost their administrative appeals rights and facing a substantial tax bill plus penalties cannot afford a good tax attorney to take it to Tax Court.

As a result, the IRS is using their muscle to claim that these workers were living on a base and had no contact with the local community and therefore their “abode-which is not clearly defined anywhere) was in the U.S.

This is the quote from the IRS page:

Tax Home
Your tax home is the general area of your main place of business, employment, or post of duty, regardless of where you maintain your family home.
Your tax home is the place where you are permanently or indefinitely engaged to work as an employee or self-employed individual. Having a “tax home” in a given location does not necessarily mean that the given location is your residence or domicile for tax purposes.

If you do not have a regular or main place of business because of the nature of your work, your tax home may be the place where you regularly live. If you have neither a regular or main place of business nor a place where you regularly live, you are considered an itinerant and your tax home is wherever you work.

You are not considered to have a tax home in a foreign country for any period in which your abode is in the United States . However, your abode is not necessarily in the States while you are temporarily in the United States .

Your abode is also not necessarily in the United States merely because you maintain a dwelling in the United
States , whether or not your spouse or dependents use the dwelling.

“Abode” has been variously defined as one’s home, habitation, residence, domicile, or place of dwelling. It does not mean your principal place of business. “Abode” has a domestic rather than a vocational meaning and does not mean the same as “tax home.”
The location of your abode often will depend on where you maintain your economic,
family, and personal ties.

Example 1.
You are employed on an offshore oil rig in the territorial waters of a foreign country and work a 28-day on/28-day off schedule. You return to your family residence in the United States during your off periods. You are considered to have an abode in the United States and do not satisfy the tax home test in the foreign country. You cannot claim
either of the exclusions or the housing deduction.

Example 2.
For several years, you were a marketing executive with a producer of machine tools in Toledo , Ohio . In November of last year, your employer transferred you to London , England , for a minimum of 18 months to set up a sales operation for Europe . Before you left, you distributed business cards showing your business and home addresses in London .

You kept ownership of your home in Toledo but rented it to another family. You placed your car in storage. In November of last year, you moved your spouse, children, furniture, and family pets to a home your employer rented for you in London .

Shortly after moving, you leased a car and you and your spouse got British driving licenses. Your entire family got library cards for the local public library. You and your spouse opened bank accounts with a London bank and secured consumer credit. You joined a local business league and both you and your spouse became active in the
neighborhood civic association and worked with a local charity.

Your abode is in London for the time you live there. You satisfy the tax home test in the foreign country.

Note that the IRS agents examining these returns are not seasoned international agents and their internal directive is to disallow the exclusion regardless of the taxpayer’s defenses and force it to go to Tax Court.

We recommend you check out Power Taxes pages before you deploy.

U.S. Expatriate Tax & Business Solutions

January 12, 2012 Posted by | Blackwater, Civilian Contractors, Defense Base Act, ExPats, Follow the Money, Legal Jurisdictions, Ronco, Ronco Consulting Corporation, Taxes, Uncategorized, War Hazards Act | , , , , , , , , , , , | 2 Comments

Somalia: ICRC Suspends Aid Deliveries

IRIN January 12, 2012

NAIROBI, 12 January 2012 (IRIN) – One of the few aid agencies excluded from a ban imposed by Al-Shabaab insurgents in Somalia has suspended food and seed distributions to 1.1m people in the south and centre of the country after local authorities repeatedly blocked its deliveries.

“The suspension will continue until we receive assurances from the authorities controlling those areas that distributions can take place unimpeded and reach all those in need, as previously agreed,” said Patrick Vial, the head of the ICRC delegation for Somalia, in a statement released on 12 January.

Without specifically mentioning Al Shabaab, which controls most of the region, the ICRC said deliveries intended for 240,000 people in the Middle Shabelle and Galgaduud had been blocked since mid-December 2011.

“We are actively seeking the cooperation of the local authorities to restore conditions that will allow the resumption of the suspended activities as soon as possible,” Vial said

Please read the entire article here

January 12, 2012 Posted by | Africa, Humanitarian Assistance, NGO's, Safety and Security Issues, United Nations | , , , , , | Leave a comment

Reckless or Reliable, the people who work with danger

There can be heavy financial costs when things go wrong.

In 2008, the US Department of Labor reported the cost of accidents in the US to be $1bn (£0.64bn) a week in both direct and indirect costs.

BBC Business News  January 12, 2012

A typical day would start with meeting the bodyguards, getting into the armoured car, and zooming off to one of the ministries. A place with so much violence – but with such hospitable people – is intriguing.”

Not the sort of working environment you would associate with a chartered accountant, but Adam Bates specialises in forensic accounting for KPMG, and was on the trail of former Iraqi dictator Saddam Hussein’s missing oil-for-food millions in Baghdad.

Adam says: “You sit in the armoured car in your pinstriped suit with your briefcase on your knee with the bodyguards around you – a big grin on your face.”

Accountancy would not be the profession that sprang to mind if you were asked to name a dangerous job.

How about Jesse James’s profession: “I spent 16 years as a bomb disposal expert in the army before joining MAG (Mines Advisory Group) International in 2004 in mine clearance. Since then I’ve worked on the Iraq programme, as well as in Lebanon and South Sudan.”

Please read the entire article here

January 12, 2012 Posted by | Civilian Contractors, Contractor Casualties, Defense Base Act, Private Military Contractors, Private Security Contractor, Safety and Security Issues, War Hazards Act | , , , , | Leave a comment

G4S fails to perform, US soldiers still guarding gates in South Korea

Update:  OCC has learned that G4S is paying 30% less than the previous contractor

Stars and Stripes January 11, 2012

SEOUL – U.S. soldiers continue to staff a number of entry gates at military installations in South Korea, six weeks after a new contractor failed to hire enough security guards to do the job.

Military officials, however, say they have no plans to sever ties with security firm G4S, even though the company is in violation of its contract.

“G4S has a realistic plan to ensure full performance, and they are meeting their milestones leading up to full performance,” military officials said in a statement. However, they would not release details of that performance plan, including when G4S would be required to fully staff gates, saying that information was “proprietary to G4S.”

Please read the entire article here

January 12, 2012 Posted by | Civilian Contractors, Contractor Oversight, Department of Defense, G4S, Korea, Private Security Contractor | , , , , , | Leave a comment