{"id":121664,"date":"2023-07-13T01:14:41","date_gmt":"2023-07-13T01:14:41","guid":{"rendered":"https:\/\/dripp.zone\/news\/irs-probes-crypto-traders-using-puerto-rico-tax-breaks-report-crypto-news\/"},"modified":"2023-07-13T01:14:44","modified_gmt":"2023-07-13T01:14:44","slug":"irs-probes-crypto-traders-using-puerto-rico-tax-breaks-report-crypto-news","status":"publish","type":"post","link":"https:\/\/dripp.zone\/news\/irs-probes-crypto-traders-using-puerto-rico-tax-breaks-report-crypto-news\/","title":{"rendered":"IRS probes crypto traders using Puerto Rico tax breaks: Report\n – Crypto News"},"content":{"rendered":"
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Prosecutors from the United States and agents from the Internal Revenue Service (IRS) are reportedly investigating wealthy crypto traders and fund managers suspected of illegally benefiting from Puerto Rico’s tax breaks. <\/p>\n

According to a June 12 reports<\/a> from Bloomberg, investigators are currently building civil and criminal cases against a number of hedge fund managers, crypto traders and other wealthy Americans who may have lied about the nature of their residency and key elements of their income in order to take unfair advantage of the tax breaks. <\/p>\n

Officials from the US are also delving into the attorneys and accountants responsible for marketing the island territory’s tax program, with at least two criminal investigations expected to result in charges in the near future. Prosecutors are reportedly looking at conspiracy and wire fraud charges. <\/p>\n

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Many claimed Act 22 would drive investment to Puerto Rico and bring untold benefits.<\/p>\n

Unfortunately, it’s only worsened inequality & turned PR into a tax haven.<\/p>\n

We need a serious analysis from the Federal gov’t on the impact of Act 22 & its ability to help Puerto Ricans. https:\/\/t.co\/eBxrW2zmP7<\/a><\/p>\n

Rep. Nydia Velazquez (@NydiaVelazquez) May 31, 2023<\/a><\/p><\/blockquote>\n

Recalling a conversation with a US federal prosecutor, attorney Carlos Ortiz said the prosecutors were working with “IRS agents” as well as officials from Puerto Rico. <\/p>\n

“The message is the noose is tightening.” <\/p><\/blockquote>\n

Since Puerto Rico introduced its new tax policy in 2012, more than 5,000 American individuals relocated to the country, one of the benefits of doing so includes saving on federal income tax.<\/p>\n

Puerto Rico’s tax policy grants individuals a 100% exemption on dividends, 60% exemption on municipal taxes and zero federal taxes on source income earned within the region. <\/p>\n

Additionally, more than 3,600 businesses have been able to avoid paying tax on dividends from earnings and profits and are only required to pay 4% tax on exports.<\/p>\n

While the tax benefits stand as some of the most relaxed in the world, the requirements to take advantage of them are quite strict. <\/p>\n

To qualify for the tax breaks, new residents must be able to prove that they live on the island for at least 183 days of each year and that the island territory is their “tax home.”<\/p>\n

These stringent rules reportedly tempt many individuals to fudge numbers and cheat on their returns, according to lawyers familiar with the regime. <\/p>\n

Notable residents who relocated to Puerto Rico for tax reasons includes<\/a> golden bug Peter Schiff<\/a> and crypto investor Michael Terpin. On July 4, Puerto Rican regulators closed down Schiff’s bank<\/a> for not meeting the net minimum capital requirements. <\/p>\n

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Despite no evidence of crimes, Puerto Rico regulators closed my bank anyway for net capital issues, rather than allow a sale to a highly qualified buyer promising to inject capital far in excess of regulatory minimums. As a result accounts are frozen and customers may lose money.<\/p>\n

\u2014 Peter Schiff (@PeterSchiff) July 3, 2022<\/a><\/p><\/blockquote>\n

speaking at the Miami’s annual Bitcoin Conference<\/a> on May 19, Terpin commended<\/a> Puerto Rico as the “only place that you can go and not have to pay on your global tax without renouncing US citizenship.”<\/p>\n

Unlike some, Terpin didn’t seem too concerned by the rigorous tax policy:<\/p>\n

\u201cI’ve been told that every single person is going to get audited, and that’s fine. I keep incredibly precise notes. I get them run past both a tax lawyer and a CPA, and I’ve got two bookkeepers. So bring it on, I’m not afraid of an audit.<\/p><\/blockquote>\n

While the island’s wealthy residents have praised the tax breaks for bringing top fund managers and entrepreneurs to the island, the tax program has been subject to protests<\/a> which declare the new hyper-wealthy residents to be low-tax “colonizers” that have driven up the cost of living. <\/p>\n

Magazine: <\/em><\/strong>Peter McCormack’s Real Bedford Football Club puts Bitcoin on the map<\/em><\/strong><\/a><\/p>\n