Act 60

IRS Takes a Hard Look at Puerto Rico Tax Breaks

The U.S. Internal Revenue Service appears to be entering a more aggressive phase of enforcement focused on taxpayers who claim Puerto Rico residency and Act 60 incentives. Recent cases underscore the shift: Miami investor Suresh Gajwani pleaded guilty to willfully making false statements to avoid paying roughly $7 million in capital-gains tax, and the U.S. Senate Finance Committee announced a probe into Pantera Capital founder Dan Morehead, alleging he abused Act 60 incentives to avoid hundreds of millions of dollars in U.S. capital-gains tax. The actions highlight rising legal risk for beneficiaries who do not fully meet the program’s requirements.