Skyhawk

Sit down with a tax professional, such as a CPA, or Enrolled Agent (if you can find one outside the U.S.), or a tax Attorney. You will need to determine, based upon all the facts and circumstances, when the security employees and related expenses are business and when the expenses are personal. Providiing meals and lodging to employees for the benefit of the employer can be a deductible expense for the employer, and tax free for the employee. You can use per diem rates and should have a reimbursement plan. For the times when the protection is for personal (non business) time and for family members that are not employees on business for the company (entity), it (entity/company) may be able to deduct the expenses, but it may be required to be included in your income. If you are self employed, and not using an entity, then there may not be a deductible expense for the personal expenses. Again, see a tax professional. The big global firms have folks in most major cities in the world.

Dan-o-

Thanks Skyhawk. The security is only necessary as a result of business, as far as I see it my ability to breath is necessary to keep the business running. If it were not for this business activity I would not need security. Because of the threat I almost never go out for personal reasons. The home I rent is 90 percent used for business, maybe thats how I should determine the applicable business charge. I would like to use per diem because its 43 dollars a day, much higher than what I actually spend in food expenses. I will continue researching.

Thanks so much for the reply.

Skyhawk

Book'em Dano! I've always wanted to say that. If you have never seen Hawii 5-0 it will not mean anything to you. Note that if you are out of the country the State Department per diem rates apply, unless you wat to use the lower rates applicable to the conterminous United States. Also note that if you provide employees with cash for meals it is taxable to them. If you reimburse them, say through a "plan", then the reimbursement is deductible by you (company) and NOT taxable to them.
The "everything I do is business" position will not fly. If you are away from home on assignment for more than a year it is a change of your tax home and there is an element of your day that is personal. Look into the foreign earned income exclusion (IRC section 911), the foreign tax credit (you cannot have it both ways, that is you cannot claim the taxes paid on income that is excluded), and the foreign tax as an itemized deduction. IRSW has publications regarding these matters and they can be found on the IRS web site (irs.gov) Cheers!

Dan-o-

Thanks again Skyhawk. Yes, I used to watch Hawaii Five-O when I was young. Every time it was on. Your info is a great help. I do have one question though.

The threat I have, and therefore security, is the result of multiple lawsuits I filed, directly related to business. The people here I am going after are powerful and corrupt (making 1 million US a year on the poor). I have the goods on them (didnt expect an American to come to their country and stay long enough to have them jailed) and the Police and NBI (FBI equivalent) have determined my life is in danger. So this threat cant be 90 percent, 50 percent, or any percent really. If I dont have security 100 Percent of the time I am in danger, and that is because of business alone. Do I still have to divide my business time (8 hrs a day) and personal (16) and then only deduct that percentage of the per diem rate and other expenses? I will follow the law, but I dont agree. I wouldnt have the expense if not for business.

Hey, thanks again. This has been hard for me to figure out.

Dan-o-

Oh, one other thing if I can take advantage of your help. My one year travel ended in May. Can I use per diem rates for security beyond that date if they are a part of the business? Thanks again!

Skyhawk

Again, see a tax professional and review the full set of facts and circumstances. There may be some legal guidance regarding security and business in the way of a Revenue Ruling or a court case. The security is an "ordinary and necessary business expense", but the question of any personal element has to be considered. I know from experience that most large international businesses provide security for their executives and their families, both in the U.S. and overseas, but I never got into the deduction issues.
The "one year or more" concept is part of the law in determining whether or not one is out of town on business or has moved his/her tax home (if the assignment is expected to last more than a year). The deductions allowed in the two situations are different, e.g. travel, meals, lodging.
Then there is the section 911 consideration, regarding the exclusion of earned income within the limits prescribed, if you are out of the U.S. for 330 days or more. If section 911 does not apply any foreign taxes paid are either used as a tax credit or a deduction, whichever gives the best tax benefit given certain limitations.
I have my doubts as to whether you can use per diem rates for a deduction for the amounts paid for employees when you are the payor. To the extent you can use the per diem rates you use the one applicable to where the expense is incurred, in the U.S., or not. The issue again needs some legal research.
You have a complex set of tax issues and professional help is needed.