Wyden Calls for Full IRS Investigation of Tax Shelter Involving Puerto Rico Residency, Unveils New Findings in Ongoing Investigation

Wyden Calls for Full IRS Investigation of Tax Shelter Involving Puerto Rico Residency, Unveils New Findings in Ongoing Investigation

Washington, D.C. - Senate Finance Committee Ranking Member Ron Wyden (D-Ore.) wrote yesterday to the IRS's head of compliance to outline new findings in his ongoing investigation of a tax shelter involving ultra-wealthy investors sheltering income from taxes by improperly sourcing income to Puerto Rico. He urged the IRS to undergo a complete investigation into potential abuse of Puerto Rico's Act 60 by ultra-wealthy individuals and revealed the existence of questionable legal opinions offered by a pair of tax attorneys to high-net-worth clients on the matter.

Whistleblowers indicated to Senator Wyden's investigation that the attorneys, Jeffrey Rubinger and Summer LePree, have helped several high-net-worth clients avoid more than $100 million in taxes by claiming Puerto Rican residency. Public reports indicate they are under criminal investigation for previous work advising clients on this tax strategy.

"The IRS is appropriately seeking to determine whether individuals who have relocated to Puerto Rico are misusing Puerto Rico Act 60 to shelter billions of dollars in income from U.S. taxes. My understanding is that there are dozens of ultra-wealthy investors who received dubious advice from partners at major law firms," Senator Wyden wrote. "I am concerned that numerous investors used these legal opinions from Rubinger and LePree to avoid federal income taxes on large capital gains that accrued prior to relocating to Puerto Rico."

Senator Wyden's letter to Jarod Koopman, Chief Tax Compliance Officer at the IRS, is available here.

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