Puerto Rico Treasury announces crackdown on tax fraud

Bonds

The Puerto Rico Treasury announced steps to crack down on tax fraud, which is widely believed to be a major problem on the island.

Reducing tax fraud is one of the goals of the fiscal plan approved by the Puerto Rico Oversight Board in May.

The U.S. Internal Revenue Service will collaborate with the Puerto Rico Department of Treasury to crack down on Puerto Rico tax fraud.

Bloomberg News

The Treasury plans to collaborate with the U.S. Internal Revenue Service and the Puerto Rico Department of Labor and Human Resources in the campaign, the Treasury said this weekend.

“I encourage noncompliants to knock on the department’s doors before we knock on theirs,” said Puerto Rico Treasury Secretary Francisco Parés Alicea. He said that the department will publicize its expectations of taxpayers in the next few months and then will begin the crackdown.

Parés Alicea said that the department will focus on six major areas of tax fraud and/or noncompliance.

First, it will examine how compliant entities and individuals are with the tax code’s tax exemption provisions and in particular Law 22-2012. In this law U.S. citizens are largely exempt from paying capital gains taxes to either the federal or local government as long as they reside on the island for more than half the year. After 10 years of residence on the island they only owe 5% of the capital gains to the Puerto Rican government.

Second, it will check compliance with the declaration and payment of motor vehicle taxes.

Third, it will ensure that taxes on crude oil and substances derived from crude oil are paid.

Fourth, it will work to make sure Sales and Use Taxes are paid for online and other electronic sales.

Fifth, construction industry companies will be examined to see if they are complying with reporting and withholding requirements.

Sixth, the department will look to be sure that so-called social media “influencers” are paying taxes on the income gained from endorsements and that participants in media and digital platforms who receive prizes report the income.

The department said it would share documents with the IRS in the department’s campaign to ensure that people are properly following Law 22-2012. The department will share information in cases where it believes that there were undue payments in the Pandemic Unemployment Assistance Program.

Articles You May Like

SpaceX denounces Justice Department’s subpoena in hiring practices investigation as ‘government overreach’
Mainnet launch and NFT sale lift Aavegotchi (GHST) to a new all-time high
Melvin Capital posts return of more than 20% in February, sources say
5 ETFs to Enhance Your Portfolio in 2021
Co-founder of Floyd Mayweather-promoted ICO sentenced to 8 years