CVX, KPMG & my crazy 2016 expat taxes. (Advice Please!)

So I just received my 2016 taxes from KPMG and a bunch of red flags got thrown up. There are some real inconsistencies with previous years and some numbers that just made me scratch my head, especially considering I only worked overseas for 4 months. So here we go:

1) All the numbers used magically work out so Chevron gets a huge refund ($25k) and I get nothing from the IRS. Their magic calculation even shows me owing chevron $14k. This is after I paid $58K in taxes.

2) The magic gross up calculation is $2k more ($19k) this year, then when compared to 2014 ($17K), and I paid more in Host taxes that year ($9k). This seems wrong because I only worked 4 months in country last year.

3) CVX is showing my host prepaid taxes for last year at $80K (for only 4 months in country), and I’m showing that I made $90k with all the “stuff” that chevron seems to add (not including the host tax). So that’s an 88% tax rate… WTF? This number gets even worse when compared to 2014 when I made over $200k and had only $89k in Host prepaid taxes, and I worked the full year in country. Did CVX pay for an entire year’s worth and decide to not get a refund? Or did they just pull some number out the sky?

4) Form 1116 (the foreign tax credit form), KPMG seemed to use all my income made both in country and outside to figure out my “total gross” and then added an extra $70k (I can’t seem to figure out where this comes from). All this “magic” math seems to be where CVX gets to receive my entire refund. (KPMG is supposed to fix this form for me and get back to me)

I pointed out the gross up calculation and the host pre-paid taxes to KPMG, and all I was told was “this information was provided by Chevron”. So what is everyone’s opinion? These numbers seem crazy for only working overseas for 4 months. They match too close to when I worked a full year overseas in 2014.

Any advice on what to do is greatly appreciated. And If you’re of the opinion I need a good CPA, can you recommend one? And should I turn over my last 4 years of taxes as well?

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24 replies (most recent on top)

Who cares about your taxes.

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Be careful. KPMG stands for Keiner Prüft Mehr Genau (German). Loosely translated back into English, it means: Dewey, Cheatem & Howe.

(Not the most honest Attorneys at Law).

Double check KPMG's work. Each year they have done my return, I've found errors in my favor.

Make sure too that your travel tracker data are correct.

I would recommend you request face-to-face discussion at KPMG's office.

Possibly, the host country will issue a tax refund (recognizing it is not for a full year) and your taxes will be adjusted next year accordingly. Just my guess. Btw, was your assignment cut short to 4 months for some reason?

No, the $70k is Chevron's cut.

Could the $70k be for living and travel allowance?

If I'm understanding the OP's issue correctly, he's not questioning paying taxes. I think his question is in regards to paying such a high Host Tax in regards to the amount of time he spent there vs. previous years.

Like many have said, find a CPA who understands the taxes of your previous host country. You might want to be prepared for this to be an expensive and long process. Especially if they need to contact a tax attorney or the country you worked in.

Remember chevron is not infallible, someone in your previous country could have made a mistake and no one has caught it. These things do happen.

I agree all the expats I know understand this as the cost of doing business. You make more, Uncle Sam takes more, you are not special

I question the Calibre or validity of an expat that goes to a layoff board to question his taxes

Try to apply this logic. Because of tax equalization, your actual taxes should be pretty close to what they would be if you were in your home country. If grossly different, there does seem to be a problem.

Often expats don't realize the generous tax offsets they receive from the company during their assignment.

You could also contact the IRS or IRS equivalent in the expat country for questions. They are the ultimate authority.

Need a good CPA firm? Go see Arthur Andersen LLP. Tell them Ken Lay sent ya!

@pmp provides the best advise so far. In the end, you may need to have KPMG logically provide you answers if your bottom line estimates do not add up with theirs.

Frankly, I would rely on the numbers from KPMG. If you have questions about it, ask them. Taxes become very complicated when working overseas as an expat for a number of years. It's not so straightforward as you might think, especially when you receive income both in the expat and home country in a given year.

One poster's suggestion to seek guidance from your own CPA is good advice. Another alternative (which I followed for the years my taxes were being done by Chevron's "firm of choice") was to do my own tax calculations using TurboTax.

My theoretical tax (my out of pocket taxes at the end of all of the to/fro with CVX) should have matched closely with what is generated by TurboTax. The few times it did not work out that way resulted in a logical and informed conversation with the tax folks. In a couple of instances, they made corrections and in one instance, I learned I had made an incorrect assumption in how I was calculating my theoretical tax (or actually how I entered it into TurboTax).

Bottom line - you cannot and should not blindly trust any outfit to calculate your taxes on your behalf - even your own CPA.

@iug

Why does this stink of BS? I pretty much gave you my exact amounts, as well as why I'm having issues with everything.

I'm just not sure if this is on KPMGs side or CVX, and if it is the latter, what options do I have? Can your everyday CPA tell me what my host pre-paid taxes should have been?

Who cares about your taxes. Go cry to mommie.

This thread smacks of pure BS. Hey, OP if by the slimmest of chances you are serious, go see a CPA, any professional accountant will do.

@ira

I realize I was only overseas for 4 months in 2016. The thing that's so odd is that everything CVX says they paid matches close to my 2014 taxes, and I worked overseas for a full 12 months that year. I would have been on track to make pretty close to the same amount last year without the ROM.

I just can't get how I can pay the same amount in overseas taxes and fees for 4 months of work, has I paid for a full year in 2014. When I was there 1/3 of the time.

Maybe its because you only worked overseas for 4 months.

Hey genius, I said I just got it in this week. KPMG automatically filed an extension, and used it!

Pull your head out and read the first sentence

OP, you just started this new thread TODAY (May 5)? Tax day was over two weeks ago. Get lost troll.

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CVX, KPMG & my crazy 2016 expat taxes. (Advice Please!)

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