WoldWide Drilling Resource

Drilling Into Money Not Boring by Mark E. Battersby Avoiding Potential Payroll Pitfalls Payroll taxes withheld by employers account for nearly 72% of all revenue collected by the Internal Revenue Service (IRS). IRS Commissioner Charles “Chuck” Rettig recently issued a stern warning against employment tax fraud, which occurs when a drilling business withholds federal income tax from employees’ pay yet fails to send it to the IRS. When employers fail to pay/send the required employment taxes, not only are they cheating the system, they’re cheating future generations relying on those taxes to help build the future. Employers know, or should know, the rules - they must deduct, deposit, and report employment taxes accurately and in a timely manner. There are also state and local requirements where deposit and reporting dates should be checked. Late payments may come with penalties and accrued interest from local, state, and federal agencies. Naturally, every employer should be regis- tered with the proper authorities and tax identifying numbers obtained. And, don’t forget other potential payroll problems. The Fair Labor Standards Act (FLSA), for example, requires the payment of a premium for overtime. Calculating overtime can be confusing since state and local wage and hour laws may come into play. When those payroll taxes due the government are not paid, are paid late, or are paid but don’t follow the correct guidelines, employers can face severe penal- ties, as well as accruing interest. Utilizing a payroll service eliminates worries about submission guidelines, accuracy of payment, and getting taxes paid on time. However, monitoring of the payroll service is important as the drilling company remains responsible. Failure to comply with any of the three components of direct deposit - timely, correct, and in the right manner - subjects an employer to the dreaded Failure to Deposit (FTD) penalty. One of the nastiest and most feared taxes currently imposed is the “Trust Fund Penalty Tax,” a whopping 100% penalty on payroll taxes withheld from a drilling operation’s employees, but not forwarded to the fed- eral government. Obviously, every employer must withhold the right amount of taxes from the paychecks of all employees, as well as understand the amounts the drilling busi- ness must contribute. In fact, understanding the basic rules for withholding payroll taxes, and paying over withheld amounts on the wages of all employees in the drilling business is a good start. Guidance and advice from a competent, qualified advisor is virtually a necessity. Mark Mark E. Battersby may be contacted via e-mail to michele@worldwidedrillingresource.com New & Used Bits, HDD Bits & Tools, Drag Bits & Wings, Bolt-On Drag Bits, Reverse Circulation Tools, Hole Openers, Claw Bits, Stabilizers, Subs, Custom Tooling & Welding, Hammer Bits, Drill Collars, Pipe Wipers, and Drill Pipe. Office: (661) 834-4348 Rod Henderson / Eran Henderson 661-201-6259 • 661-330-0790 sales@bitcobits.com www.bitcoinc.us 51 WorldWide Drilling Resource ® JULY 2019 Longest Known Lateral in the Permian Basin Adapted from Information by Surge Energy US Holdings Company Based on IHS and Drillinginfo databases, the longest known lateral in the Permian Basin was drilled earlier this year by Moss Creek Resources Holdings, Inc., a wholly owned subsidiary of Surge Energy US Holdings Company. The Medusa Unit C 28-09 3AH was successfully drilled 100% in zone of the Wolfcamp A Formation to a total measured depth of nearly 24,600 feet (total vertical depth of around 7100 feet). The record-breaking well was drilled with a total horizontal displacement of 17,935 feet. Surge Energy partnered with Latshaw Drilling & Exploration’s Rig 10 and Pro Directional for directional drilling services. It took 18 days for this technological accomplishment to be executed from surface to total depth. The drill crew utilized conventional mud motor and measurement-while-drilling (MWD) technology. The well is expected to be completed and brought online later in the year. “This industry milestone in the Permian Basin is our latest example of the innovation and technical expertise being executed by the Surge Energy Team,” stated President and CEO Dexter Burleigh. “We are ex- tremely proud of our drilling team for this significant achievement. DIR