Clark Armitage and Dianne Mehany Weigh in on Act 20 and Act 22 Beneficiaries in Puerto Rico
An Internal Revenue Service (lRS) report has estimated that the thousands of Act 22 beneficiaries in Puerto Rico paid millions to the U.S. Treasury before moving to the island and they subsequently stopped paying, as part of the tax incentives granted under their decrees. Now these individuals are under increased scrutiny by the IRS to ensure they are in compliance with their tax obligations.
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Although the IRS campaign only references Act 22 beneficiaries, one can reasonably expect that an IRS inquiry into an individual holding an Act 22 decree would likely expand into at least a review of the Act 20 entities that provide sources of income to such individuals, according to law firm Caplin & Drysdale. “Taxpayers should review their reporting positions and, if appropriate, consider rectifying past non-compliance now,” said the firm in announcing an alert.
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