Tax Memorandum

Tax Memorandum

Purpose

The purpose of this memorandum is to analyze the United States federal tax withholding requirements with regard to the payment of wages to non-resident alien yacht crew members through a foreign-based company. There are many potential pitfalls associated with paying wages to non-resident aliens including, but not limited to, the correct sourcing of income, allocation issues, and, if those wages are subject to tax, the identification of the person or entity responsible for withholding. The Internal Revenue Service (I.R.S,) provides for fees and civil penalties for the failure to properly collect and remit taxes. Thus, adherence to the rules ...