Government Bails Out Bahamasair Over $6.6 Million In Unpaid Taxes

by Amanda Banks, Tax-News.com, London

20 August 2001

The Bahamas government announced on Thursday that it has paid the first instalment of the $6.6 million owed by Bahamasair to the US Internal Revenue Service.

Minister of Tourism Tommy Turnquest, who also has responsibility for the stricken national airline which lost over $25 million last year, told a press conference that the first payment had been made on August 15th, with the balance to be paid over the next two months.

Mike Dobzinski, regional spokesman for the IRS, said that issuing the federal tax lien and threatening to seize the airline's assets was a last resort measure on the part of the US tax authorities: 'A lien is filed only after the IRS has dealt with a company for as much as six months and they've either ignored our notices, or haven't cooperated, or neglected or failed to pay,' he explained.

Bahamasair had reportedly failed to pay type 270 taxes for seven quarterly periods from December 31st 1998 to June 30th 2000. However, the IRS would not confirm whether the unpaid excise tax was related to airline tickets, tyres, or fuel, all of which are common targets.

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