A US Airline
A US airline had to withhold taxes on wages paid to foreign flight attendants who staffed flights between the United States and other countries, the IRS said in a long technical advice memorandum that the agency released in mid-April.
A technical advice memorandum is a ruling by the IRS national office in a dispute between a company and an IRS agent on audit.
All of the flight attendants in question are based abroad and are paid in local currencies. The IRS said the airline had to apportion part of their wages each year to the United States based on the total hours that each works inside and outside the United States and withhold US taxes on the share of wages apportioned to the United States. However, withholding is not required if a flight attendant is physically present in the United States in fewer than 90 days during the year and less than $3,000 in wages are apportioned to the United States.
The ruling goes into great detail about when so-called FICA and FUTA taxes — for Social Security, Medicare and unemployment benefits — must also be paid. It is Technical Advice Memorandum 201014051.