The U.S. Internal Revenue Service (IRS) added Act 22 of 2012 to its audit campaign to identify individuals who have benefited from the benefits of the statute without complying with the requirements of Code 937 of the United States. Internal Revenue Code that allows you to exclude income or be treated as bona fide residents of Puerto Rico.
Law 22 allows U.S. citizens to avoid paying federal taxes after moving to the island.
According to a Mayer Brown law firm, the IRS campaign is also intended to determine whether individuals claiming benefits from Code 933 and complying with Code 937 requirements are inadequately claiming non-generated income in Puerto Rico as such. to avoid paying federal taxes.
The IRS campaign comes after the federal agency prepared a report last year outlining the need for more information from the Treasury Department on taxpayers who allege they have moved to the island and have become beneficiaries of Law 22.
At first the IRS will address non-compliance through examinations, disclosure and briefings. At the moment, it is unknown whether an amnesty program will be offered to individuals and companies wishing to modify their tax return as a result of the benefits arising from the interaction of contributory benefits of the United States and Puerto Rico, says Mayer’s newsletter Brown.