At least once a week in the cryptocurrency community, there is a new post or article encouraging crypto investors to relocate to Puerto Rico to avoid tax. Relocating to the Caribbean is certainly an attractive proposition, but is it too good to be true? In the words of every good tax professional everywhere, “It depends.” Becoming a resident of Puerto Rico does have some potential tax benefits that come with it, but it is no slam dunk decision. Let’s take a trip together to the Island of Enchantment, grab a cocktail on the beach, and lower our tax bill!
Editor’s Pick: Tax Planner Faces Malpractice Claims Over Decades-Old Tax Advice—What Went Wrong?
In a case that every tax professional should take note of, the prominent law firm Sidley Austin LLP finds itself defending against claims that it provided faulty tax advice over two decades ago, leading to massive IRS liabilities for a family. The plaintiffs, the Cáceres family, are seeking to recover $7 million after settling with the IRS, claiming Sidley’s advice on a complex asset liquidation set them up for disaster. The kicker? The lawsuit was filed over 25 years after the advice was given. So, how are the plaintiffs still able to pursue the case? It all boils down to a claim of fraud—and how that could toll the statute of limitations.