US prosecutors and IRS investigators are allegedly investigating wealthy traders of crypto and managers of funds on suspicion of receiving unauthorized tax benefits from Puerto Rico. Inspectors are currently developing criminal and civil cases against various managers of hedge funds, traders of cryptocurrency, and other Americans who perhaps have not been truthful about the situation of their housing and essential components of their earnings to unfairly benefit from the revenue breaks, according to a June 12 report from Bloomberg.
IRS Officials from the United States would also be examining the lawyers and accountants who are in charge of promoting the tax scheme for the island territory, and it is anticipated that at least three of these criminal investigations may lead to charges soon. Authorities are considering accusations of wire fraud and conspiracy.
Investigators Have Collaborated With Puerto Rico And IRS Officers
Attorney Carlos Ortiz recalled speaking with a federal prosecutor in the United States and learning that the investigators were collaborating with Puerto Rican and IRS officers. Above 5,000 Americans have moved to Puerto Rico since the island’s new tax system was implemented there in 2012; one perk of doing this is avoiding paying federal income revenue.
Individuals are given a 100% exclusion on dividends under Puerto Rico’s tax laws, a 60% deduction on municipal revenues, and no federal revenues on income sources received in the territory. Over 3,600 companies have also been allowed to not pay revenues for now on bonuses from income or profits and have only been asked to pay 4% in export taxes.
Although the benefits are among the most lenient in this world, there are severe restrictions to qualify for them. To be eligible for the benefits, prospective citizens would have to demonstrate that they spend 183 days a year at least, living on the island and that it is their “tax home.”