Puerto Rico Residency Tax Incentives and Audit Risks for U.S.-Based Individuals and Businesses
Puerto Rico Act 60, Key Issues for Taxpayers, Navigating IRS Examination and Audits, Tax Planning
Recording of a 90-minute premium CLE/CPE video webinar with Q&A
This CLE/CPE webinar will provide tax guidance on Puerto Rico residency tax benefits and incentives for individuals and businesses and navigating applicable tax rules and IRS examination for Puerto Rico Act 60 grantees. The panel will discuss best practices to prepare for IRS audits for individuals and businesses taking advantage of U.S. tax incentives for Puerto Rico-sourced income. The panel will also discuss the favorable treatment of capital gains and dividend income and the challenges of relocating to Puerto Rico as an alternative to tax expatriation. The webinar will also detail residency requirements and outline potential caveats to U.S. taxpayers considering a relocation to Puerto Rico for tax purposes.
Outline
- Overview of Puerto Rico Act 60
- IRC provisions specific to Puerto Rico and certain U.S. territories and possessions
- Section 933
- Section 937 special residency rules
- IRS notice requirements
- Establishing residence
- Determining the limits of Puerto Rico-source income
- Likely areas of audit and disagreement
- Caveats
Benefits
The panel will review these and other relevant topics:
- The impact and focus of the IRS audit campaign for Puerto Rico Act 60 grantees
- How Internal Revenue Code provisions and Puerto Rico local tax statutes provide a tax-favored environment for certain high net worth taxpayers
- Specifics of Puerto Rico's Act 20 (Export Services Act) and Act 22 (Individual Investors Act) as vehicles for attracting U.S. mainland-based taxpayers to relocate to Puerto Rico
- Timing, notice, and qualification requirements to claim tax benefits
- Best practices to avoid or minimize the chances of being subject to IRS examination
Faculty
J. Clark Armitage
Member
Caplin & Drysdale
Mr. Armitage's core practice is advising multinational corporations on transfer pricing in all contexts, from... | Read More
Mr. Armitage's core practice is advising multinational corporations on transfer pricing in all contexts, from planning to cross-border dispute resolution. He has a particularly strong background interacting with tax authorities on advance pricing agreements (APAs) and Competent Authority matters for corporations in a wide range of industries. He spent eight years in the IRS Advance Pricing Agreement Program, serving as Deputy Director, where he both experienced and oversaw the full spectrum of Program activities. He helps clients address transfer pricing, valuation, permanent establishment, and other international tax issues and controversies.
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Mark H. Leeds
Partner
Mayer Brown
Mr. Leeds focuses his practice on the tax consequences of a variety of capital markets products and strategies. He... | Read More
Mr. Leeds focuses his practice on the tax consequences of a variety of capital markets products and strategies. He advises on the tax aspects of capital markets, structured finance, derivatives, financial products and insurance transactions and has extensive experience working with both buyers and sellers to develop and structure complex derivatives. A significant portion of his work involves the taxation of financial products and trading strategies engaged in by banks and other financial market participants.
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Heather D. Schafroth
Attorney
Caplin & Drysdale
Ms. Schafroth joined Caplin & Drysdale’s International Tax Group as an Associate in 2020. Her practice... | Read More
Ms. Schafroth joined Caplin & Drysdale’s International Tax Group as an Associate in 2020. Her practice focuses on advising individuals and businesses on a broad range of tax issues with a particular focus on international tax and transfer pricing planning and advocacy for corporate clients.
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