Upcoming Audits by Puerto Rico's Hacienda in Cooperation with the IRS
Tax matters subject to new audit and investigation campaigns
Attention
All contributors
Informative Bulletin BI RI 03-21 02/19/2021 Internal Revenues
In order to determine the correction of any return or statement, or in order to prepare a return when none has been filed, the Secretary of the Treasury ("Secretary") may, through any official or employee of the Department of the Treasury ( "Department"), or by electronic means, examine any books, papers, records or memoranda pertinent to the matters that must be included in the return or declaration, and may require the appearance of the person filing the return or declaration or that of any officer or employee of said person, or the appearance of any other person who has knowledge about the matter in question, and take a statement from them regarding the matters that by law must be included in said return or statement,with the power to take oaths to said person or persons.
The Tax Audit Bureau of the Internal Revenue Area is responsible for ensuring compliance with the Puerto Rico Internal Revenue Code of 2011, as amended ("Code"), and other special laws. In addition, the Taxes Processing Bureau of the Internal Revenue Area is in charge of processing all the returns received in the Department and validating the information submitted by the taxpayer.
On the other hand, the Department has an Intelligence and Tax Fraud Area whose purpose is to investigate cases related to possible violations of Puerto Rico's tax and tax laws.
The Department has implemented strategies to carry out tax audits and investigations. As part of said strategies, the Department will establish those tax matters that it identifies as priorities and develop auditing and investigation processes for taxpayers who are in those categories of tax matters.
In addition, the Department as a result of several interviews and efforts, will be receiving from the Federal Internal Revenue Services (“IRS”) tax information reported to taxpayers resident of Puerto Rico at the federal level.
On the other hand, the Department will be collaborating with the IRS with the necessary documentation to comply with the work plans established in the compliance campaign issued by said agency on January 27, 2021 in relation to individuals with tax exemption decrees under the Law. 22 of 2012, as amended (“Law 22-2012”).
The Department issues this Informative Bulletin with the purpose of informing all taxpayers of the tax matters that will be the subject of new audit and investigation campaigns that both the Tax Audit Bureau of the Internal Revenue Area, as well as the Intelligence and Tax Fraud Area will be carried out during the year 2021 and subsequent years.
The Department has determined as a priority that the audit and investigation processes to be carried out beginning in 2021 will be focused on the following tax matters:
Compliance of entities and individuals with the requirements established in the tax exemption decrees granted under the different incentive laws and the Code, including, but not limited to, decrees issued under Law 22-2012.
Compliance with the declaration and payment of motor vehicle taxes.
Compliance with the declaration and payment of taxes on crude oil, partially processed products and finished products derived from oil and any other mixture of hydrocarbons.
Compliance with the collection and deposit of Sales and Use Tax on sales made through electronic means, including, but not limited to, sales over the Internet.
Compliance with the payment of income tax and with the requirement to report payments for ads paid to people who use digital media or platforms, including, but not limited to, "influencers", as well as compliance with reporting and payment of contribution on income from prizes, giveaways, and similar compensation received through participation in media or digital platforms.
Compliance with the reporting and withholding requirements applicable to companies engaged in the construction industry, including foreign companies.
In addition, the Secretary will share information with the Department of Labor and Human Resources in cases where, based on tax information in our system or the absence thereof, there may be any suspicion of improper payments under the Pandemic Unemployment Assistance Program (“ PUA ”, for its acronym in English).
Finally, any person who stops filing a return or declaration on the date established by law, the Secretary shall proceed to prepare and send the return or declaration ex officio using the tax information available in the system and any other information that may be obtained through testimony. in another way.
Any taxpayer who understands that he has a tax exposure under any of the aforementioned matters and voluntarily wishes to file a disclosure with the Department before being notified that he will be subject to an audit or investigation, must refer to the Office of Voluntary Disclosure of the Bureau of Fiscal Audit and Administrative Determinations Nos. 09-03 and 10-08 issued by the Department.
Any information that a person possesses and wishes to share with the Department related to non-compliance with any of the aforementioned tax matters may be confidentially reported through SURI Confidencia on the Department's website using the link: https: // suri .hacienda.pr.gov .
The provisions of this Newsletter are effective immediately. For additional information related to the provisions of this Newsletter, you can send a message through your SURI account.
Cordially,
Francisco Parés Alicea
Secretary