U.S. Sen. Ron Wyden (D-OR) has called for the Internal Revenue Service to investigate abuse of a tax shelter that allows the ultra-wealthy to shelter income from taxes by sourcing that income to Puerto Rico.
Wyden, the ranking member of the Senate Finance Committee, said he sent a letter to the IRS’s head of compliance outlining findings in his ongoing investigation of the issue, and asked the agency to undergo a complete investigation into the issues as well as into its potential abuse.
Wyden said that whistleblowers have indicated to him that two attorneys, Jeffrey Rubinger and Summer LePree, helped several high-new-worth clients about more than $100 million in taxes by claiming Puerto Rican residency. Public reports indicate the attorneys are under criminal investigation for previous work advising client on the same 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,” 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.”
Wyden sent his letter to Jarod Koopman, chief tax compliance officer at the IRS.