A group of U.S. House Democrats is urging the IRS to provide an update on the agency’s investigation of tax incentive abuses designed to lure investors to Puerto Rico and spark economic growth. The schemes involve high-net-worth individuals reaping the benefits of Puerto Rico’s Act 22. This law exempts new Puerto Rican residents from federal tax on income, interest, dividends and capital gains sourced to Puerto Rico if they live there for at least half of the year and donate $10,000 to approved local charities. The IRS began its investigation in 2021, flagging 100 individuals as culprits, many of whom will likely face criminal investigations. No public information has since been released.
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