Prompted by congressional scrutiny of the Internal Revenue Service’s (IRS) efforts to root out those abusing lucrative Puerto Rico tax benefits, the agency has committed to devoting more resources to audits of those taking advantage of the tax benefits. The Commonwealth of Puerto Rico passed Acts 20 and 22 (collectively, Act 60) to encourage U.S.-based individuals and companies to relocate to Puerto Rico in an effort to stimulate the Puerto Rican economy. In order to qualify for these benefits, however, an individual must become a bona fide resident of Puerto Rico and their income must be Puerto Rican-sourced income. [4] Naomi Jagoda, Hill Tax Brief: IRS Escalates Audits on Puerto Rico Tax Break, June 10, 2024, https://www.bloomberglaw.com/bloomberglawnews/daily-tax-report/X75RHT4K000000?bna_news_filter=daily-tax-report#jcite. L. 116-93 Regarding Interaction of Certain Puerto Rico and U.S. Tax Laws (Nov. 2020) (Tax Notes 2020-43051).

Source: New York Times June 12, 2024 19:22 UTC