Business Structuring & Tax Sweat Equity in Puerto Rico: What Founders Should Know Before Trading Ownership for Services AC By Aniris Castellano, Esq., CPA Izquierdo Law LLC Sweat equity is one of the most common ways Puerto Rico businesses attract the talent they need to grow. But handing someone ownership in exchange for their work can trigger a tax bill that few founders see coming, and the rules get more complicated the moment the deal crosses between Puerto Rico and the mainland. Here is how to structure it so it strengthens your business instead of surprising it. ISweat Equity Is Everywhere, and So Are Its Tax Traps Sweat equity is ownership you grant to someone in exchange for their work rather than for cash or property. Every day, more Puerto Rico companies use it to recruit executives, lead operators, advisors, and other professionals. The Island sits squarely inside this practice because people move freely between Puerto Rico and the United States, and because several statutes actively encourage deep ties of capital and talent between both. That means a business on either side can recruit a service provider from the other. The catch is that these arrangements cross tax borders. That adds a layer of complexity driven mostly by two things: how your entity is classified for income tax purposes, and where the person receiving the equity actually works. Most parties never think about any of this when they sign. This article maps those borders from the point of view of a Puerto Rico LLC taxed as a partnership. IIThe Trap Most Founders Miss: Services Are Not Property When you contribute cash or property to a partnership in exchange for an ownership stake, there is generally no tax on that exchange. Services do not receive the same treatment. Both the federal and the Puerto Rico tax codes treat services differently from property, so that tax deferral provision does not apply to services. The value of the ownership interest you hand over for services can become ordinary taxable income to the person who receives it. Two principles control the outcome. First, whether receiving the interest is taxable depends on the facts and circumstances of the deal. Second, if it is taxable, the amount equals the fair market value of the interest received. The IRS spelled out how to apply that facts-and-circumstances test in two guidance documents, Revenue Procedures 93-27 and 2001-43, which are the backbone of how sweat equity is structured today. IIITwo Kinds of Ownership: Capital Interest vs. Profits Interest The difference between these two is where the tax outcome is won or lost. A capital interest would give the holder a share of the money if the company sold all its assets at fair market value and distributed the proceeds in a full liquidation at the grant date. A profits interest is anything other than that. It shares only in future profits and would receive nothing in a liquidation as of the grant date. Here is why it matters: a properly structured profits interest granted for services is generally not a taxable event when the person receives it. There are three exceptions to watch for: (i) an interest tied to a substantially certain and predictable income stream; (ii) an interest sold within two years of receipt; and (iii) an interest in a publicly traded partnership. Outside of those, the plain takeaway is powerful. If you give someone a stake in future upside that would be worth zero in a liquidation today, you usually avoid the upfront tax hit. IVVesting, Done the Right Way Most founders want the equity to vest over time, and that is fine. Revenue Procedure 2001-43 confirms that the profits-interest test is applied at the moment of grant, even if the interest vests later, as long as three conditions are met: (i) the company and the service provider treat that person as an owner from the grant date and report their share of income for the whole period; (ii) no one deducts the value of the interest at grant or at vesting; and (iii) all the other conditions of Revenue Procedure 93-27 are satisfied. Because those conditions can slip in real life, a conservative safeguard is to file a protective Section 83(b) election within 30 days of the grant, stating a value of zero. Think of it as inexpensive insurance in case the IRS later argues one of the conditions was not met. VYour Operating Agreement Is the Evidence When these arrangements are challenged, courts look first at the operating agreement. In a leading Tax Court case, ES NPA Holding, LLC v. Commissioner, T.C. Memo. 2023-55 (May 3, 2023), the deciding factors were the capital structure, the liquidation waterfall, and the valuation. The service provider held units with a zero capital account, so they would have received nothing in a hypothetical liquidation on the grant date, which made the units a profits interest. The court also held that a real arm’s-length sale of units days before the grant was better evidence of value than a later expert appraisal. The practical lesson is simple. The capital structure, the liquidation waterfall, and a defensible valuation are what qualify a grant for profits-interest treatment. Write them down, and back the value with a real transaction whenever you can. VIThe Puerto Rico Gap Here is a wrinkle specific to the Island. Puerto Rico has not adopted its own version of these safe harbors. No regulation, circular letter, or administrative determination from the Puerto Rico Treasury Department currently mirrors Revenue Procedures 93-27 and 2001-43. That gap matters, but it is not a dead end. Puerto Rico’s partnership rules were modeled on the federal ones, so the federal guidance and Tax Court decisions are highly persuasive here even though they are not binding. The conservative approach on the Puerto Rico side mirrors the federal one: grant an interest with zero liquidation value on the grant and vesting dates, document a hypothetical liquidation, and take the position that the interest has no ascertainable
The IRS Just Issued a Warning About AI and Your Tax Data. Here Is What It Means for Your Business.
Tax & Compliance The IRS Just Issued a Warning About AI and Your Tax Data. Here Is What It Means for Your Business. The rules that govern tax professionals apply fully to AI-assisted work. There is no AI exception, no grace period, and no “the computer did it” defense. If your accountant or tax attorney is using artificial intelligence to prepare your returns, the IRS has something to say about it. And as a business owner, you should be paying attention, because the data at risk is yours. On June 24, 2026, the IRS Office of Professional Responsibility (OPR) issued Alert 2026-19, “Introductory Guidelines for Responsible AI Use in Federal Tax Practice.” Its message is direct: the rules that govern tax professionals, Treasury Circular 230 (31 C.F.R. Part 10), apply fully to AI-assisted work. In the OPR’s words, technology is a powerful tool, not a substitute for professional judgment. Here is what the warning actually says, and what it means for you. The IRS’s Core Warning: AI Can Fabricate Data, and Your Data Can Leak The bulletin identifies two risks every business owner should understand. First, AI makes things up. Generative AI can produce fabricated outputs (hallucinations), bias, and opaque reasoning. Courts have sanctioned lawyers for filings containing fake citations, with penalties including financial sanctions of several thousand dollars, public censure, mandatory ethics courses, default judgments, removal from cases, and referrals to state bar authorities. And it is not just lawyers. The OPR cites a report Deloitte Australia prepared for the Australian government in 2025 that contained invented quotes attributed to a judge, references to non-existent reports, and books ascribed to the wrong author, all apparently produced by generative AI. Deloitte reportedly refunded part of its fee. If your tax professional files something built on fabricated AI output, the professional gets disciplined, but your return is the one that is wrong. Second, and more important for you: AI tools can expose your confidential tax data. The OPR describes a risk most business owners have never considered: data a firm feeds into an AI system for one client can be repurposed by the program when answering questions about a different client. Your financials could literally bleed into someone else’s file. On top of that, uploading data to public or unsecured AI platforms risks unauthorized disclosure of tax return information, which carries civil and criminal penalties under IRC Sections 6713 and 7216(a), and separately violates Circular 230 Section 10.51(a)(15). “Tax return information” is defined broadly and includes your name, address, and identifying numbers (Treas. Reg. Section 301.7216-1(b)(3)). The IRS’s instruction to practitioners: handle all client data using only secure, enterprise-approved AI. If your tax preparer pastes your financial statements into a free public chatbot, they may be violating federal law with your data. Public AI vs. Private AI: What Is the Difference? The bulletin tells practitioners to use only “secure, enterprise-approved AI” and to never upload sensitive data to public or unsecured systems. Here is what that actually means. Public AI is the free, consumer version of a chatbot, used with no contract governing your data. Think free ChatGPT, free Google Gemini on a personal account, Meta AI inside WhatsApp or Instagram, or any chatbot someone signed up for with a personal email. On these platforms there is no agreement protecting confidentiality, inputs may be used to train the model, and the firm has no control over where the data goes or who can access it. When client financials are pasted into one of these tools, the information has left the firm’s control. Period. Private (enterprise) AI is a tool deployed under a commercial agreement with real data protections: the provider commits in writing that your inputs are not used to train models, data is encrypted, access is controlled by the firm, and usage can be audited. Examples include Claude for Work, ChatGPT Enterprise, Microsoft 365 Copilot running inside a firm’s own Microsoft environment, Azure OpenAI deployments, and the AI built into professional research platforms like Westlaw Edge, Bloomberg Tax, and Lexis-Nexis, which the IRS bulletin itself mentions. Some firms go further and run AI models entirely on their own computers, so sensitive data never leaves the office at all. The Three-Question Test Is there a signed commercial agreement covering confidentiality and data use? Does the provider commit in writing that inputs are not used to train its models? Can the firm control access, monitor usage, and delete data? Yes to all three means enterprise-approved. No to any means the tool should be treated as public, and your data should stay out of it. Watch for the trap in the middle: a paid individual subscription to a consumer chatbot is still not enterprise-approved, because the firm has no agreement, no administrative control, and no audit trail. The account belongs to the employee, not the firm. A simple analogy: public AI is like discussing your finances in a crowded café, where you cannot control who is listening. Private AI is a conference room in your advisor’s office with the door closed and confidentiality agreements signed by everyone inside. What the IRS Now Requires of Your Tax Professional The bulletin walks through five Circular 230 provisions that directly affect the service you receive: 1. Due diligence (Section 10.22). Your practitioner must thoroughly review every AI-created document before it reaches you or the IRS, verifying the accuracy of facts, citations, and calculations. Sole reliance on AI is not permitted; human scrutiny and editing are essential. 2. Fees (Section 10.27(a)). This one goes straight to your bottom line. Billing clients for time not actually spent because AI did the work faster, or double billing for AI-assisted tasks, may constitute an “unconscionable fee.” The OPR says cost savings should be passed on openly, that practitioners should disclose the AI activities performed, and that they should fairly credit cost reductions to the client’s account. 3. Competence (Section 10.35). Practitioners must understand both the tax law and the AI systems they use, including how those systems generate content,
Tax Season Started. Are you ready?
How 480s can keep more money in your pockets Puerto Rico’s tax compliance has many steps; income tax returns, volume of business returns, CRIM personal property return, DOS and DDEC annual reports, informative returns, DTRH returns, and federal returns. Please take this as a reminder that there is an upcoming deadline for your required informative returns (Forms 480). WHAT ARE FORMS 480? Forms 480 are Puerto Rico informative returns, similar to U.S. Forms 1099. They report payments made by a business to vendors, service providers, and other payees during the year. Filing some of these forms is not optional, they are a statutory compliance requirement under the Puerto Rico Internal Revenue Code. For example, you are generally required to file a Form 480.6SP for any professional service provider you paid in excess of $500 and include the amounts withheld or the withholding waiver. Additionally, if Alternative Minimum Tax (AMT) applies, reporting may be required starting at $1 to preserve the deduction. There are also other Forms 480, including but not limited to those applicable to technological tools and subscriptions, royalties, advertising expenses, insurance premiums, among others. WHY ARE 480s CRITICAL? The Puerto Rico Internal Revenue Code conditions the deductibility of many business expenses on the proper and timely filing of the required Forms 480 and, when applicable, the remittance of withholding taxes. Additionally, if you are applying for tax credits under an incentives decree (including Act 60), Forms 480 are an essential part of the AUP evaluation of the compliance process. Failure to file the required 480s may result in the disallowance of expense deductions, even if the expenses were legitimately incurred. WHO MUST FILE AND WHEN? • One Form 480 must be filed by the Company per vendor for payments made during the 2025 tax year. • Filing deadlines vary by form; however, most Forms 480 are due on or before February 28, 2026. Confirm applicable deadlines with your tax preparer. PENALTIES FOR NONCOMPLIANCE. Noncompliance carries significant penalties: • $500 per form for late filing. • $500 per form for failure to file. Penalties apply per vendor, per form. IMPORTANT REMINDERS • Filing Forms 480 is separate from issuing invoices or paying vendors. • Certain payments require withholding unless a valid waiver or certificate of relief applies. • Payments for services rendered by individuals, corporations, and partnerships are generally reported on Form 480.6SP. ACTION REQUIRED. You must contact your tax preparer immediately to: Review all vendors and service providers paid during 2025; Prepare and file all required Forms 480; and Ensure that deductions and tax credits are not jeopardized due to noncompliance. Discuss with your tax preparer about your filing obligations and submitting the required forms accurately and on time. This will enable you to keep more money in your pocket by being compliant. This communication and the attached information are provided for reference and coordination purposes only. Please note that Izquierdo Law LLC is a law firm and does not preparer tax filings. We can provide you with contact information for tax preparers, if you do not have one.
Critical January 30th Deadline for Act 60 Annual Report: Are You Compliant?
Critical January 30, 2026 Deadline for Act 60 Annual Report Compliance What decree holders need to know now If you hold an Act 60 decree in Puerto Rico, the January 15, 2026 deadline for filing the 2024 Exempt Business Annual Report, also known as the Informe Anual Exento (IANE), has now passed. The focus is no longer on extensions. It is now on avoiding penalties and protecting your decree. What is the IANE and why it matters The IANE is a mandatory Act 60 compliance filing submitted through the Incentives Portal. It is how the Puerto Rico Department of Economic Development and Commerce (DDEC) verifies that a decree holder continues to meet the terms and conditions of its Act 60 decree. This filing is separate from the Puerto Rico income tax return and is required even if the tax return was extended. Prior to this year, the Incentives Portal was not enabled for all decree holders under Act 60. This limited which taxpayers could comply electronically and created uncertainty for decree holders under other incentives programs. Historically reporting was only enabled for Act Nos. 73-2008, 20-2012, 22-2012, 135-1997, and 83-2010, as amended (“prior incentives laws”). DDEC Informational Bulletins No. DDEC 2025-007, 2025-008, and DDEC 2025-016 changed this. Now decree holders of Young Entrepreneurs, Scientists, Doctors, Tourism businesses, Private Equity, Historical Zones, Assisted Living, Social Interest Housing, Agroindustries and Bonafide Agriculturer, Film, Air and Maritime Transportation, and Cruise ships can and must file the annual report via the incentives portal. What happens now that the compliance deadline has passed and the January 30 relief window applies Under DDEC Informational Bulletin No. DDEC 2025-016, decree holders who did not file the 2024 IANE are considered non-compliant. DDEC has provided a short relief period, but it is closing quickly. If the IANE is filed on or before January 30, 2026, the non-compliance notice is voided and no automatic penalty applies. This is the final opportunity to file the IANE without financial consequences. Penalties and decree risk after January 30 If the IANE is not filed by January 30, 2026, enforcement escalates: Revocation can result in the loss of Act 60 benefits and the application of regular Puerto Rico income tax rates, which can reach up to 37.5 percent. Who should take action now This applies to Act 60 decree holders, as well as decree holders under prior incentives laws whose decrees are now reported through the Incentives Portal, who were required to file the 2024 IANE and have not yet done so. It does not apply if the report was already filed in accordance with the decree or if the decree does not require filing this report. If you are unsure whether the IANE was required or whether it was properly filed, do not assume compliance. Bottom line January 30, 2026 is the last opportunity to correct non-compliance before penalties and potential decree revocation begin. If you hold an Act 60 decree, now is the time to: Taking action before January 30 can avoid penalties and help protect your Act 60 benefits. If you need assistance reviewing your compliance status or completing the filing, contact us at support@izquierdolawllc.com.
3 Errores Costosos Legales Que Cometen Las Empresas Nuevas
https://youtube.com/shorts/pD6zsNTeXFE Negocios y Marcas en Puerto Rico Lo Que Debes Hacer Antes de Registrar Tu Marca o Crear Tu Negocio en Puerto Rico ILIzquierdo Law LLCDerecho corporativo, contributivo y de marcas Iniciar un nuevo negocio es un viaje emocionante lleno de planificación, creatividad y trabajo duro. Una de las primeras y más importantes decisiones que tomarás será elegir la estructura legal adecuada y seleccionar un nombre y logo memorables. Aunque la emoción de comenzar puede tentarte a “disparar de la vaqueta”, omitir un paso crítico puede causarte dolores de cabeza y gastos significativos más adelante. ¿Ese paso? Investigar a fondo el nombre, logo y elementos de marca que has elegido para tu negocio. Antes incluso de radicar cualquier documento o invertir en el desarrollo de tu marca, es fundamental verificar la disponibilidad del nombre, logo y branding que deseas usar. Esto implica realizar búsquedas tanto en el Departamento de Estado de Puerto Rico como en la base de datos de la Oficina de Patentes y Marcas de los Estados Unidos (USPTO). No hacerlo puede resultar en errores costosos. Las Estructuras Legales de Negocios en Puerto Rico En Puerto Rico, las formas principales para organizar un negocio con fines de lucro son: Negocio Propio (DBA – Doing Business As): Este es un negocio creado por una sola persona natural sin formar una entidad legal separada. Es la forma más sencilla de operar un negocio, ya que no requiere registro como entidad en el Departamento de Estado, aunque puedes registrar un nombre comercial para proteger tu identidad. El dueño reporta las ganancias y pérdidas del negocio en su planilla de contribución sobre ingresos personal y está sujeto a la contribución sobre trabajo por cuenta propia (self-employment tax) sobre las ganancias. En esta estructura, el dueño es personalmente responsable por las deudas y obligaciones del negocio con todos sus bienes presentes y futuros, incluyendo los ganaciales. Corporación: Una corporación es una entidad legal reconocida por ley, separada de sus dueños (accionistas). Un beneficio clave es la responsabilidad limitada de sus dueños. Este tipo de estructura es común para levantar capital (por preferencia de inversionistas foraneos menos familiarizados con las LLC) pero tiene mayores requisitos del Departamento de Estado y en general menos flexibilidad contributiva. Una corporación requieren procedimientos formales bajo la Ley General de Corporaciones, tener estatutos (bylaws), una junta de directores, llevar contabilidad y mantener libros corporativos. Deben radicar un informe anual en el Departamento de Estado a más tardar el 15 de abril. La formación requiere radicar un certificado de incorporación en el Departamento de Estado. El nombre debe distinguirse de otras entidades registradas en el Departamento de Estado y debe incluir términos como “Corporación”, “Corp.”, “Incorporado” o “Inc.”. Deben mantener una oficina designada y un agente residente en Puerto Rico. Los tipos comunes incluyen la Corporación Regular, Corporación Intima (máximo 75 accionistas, menos formalidades), y Corporación de Servicios Profesionales (para profesionales licenciados, todos los accionistas deben estar licenciados, el nombre incluye siglas como CSP o PSC). Por defecto, las corporaciones están sujetas a contribución sobre ingresos corporativa, lo que puede llevar a doble tributación, pero pueden elegir tributación de pass-through si son elegibles. Compañía de Responsabilidad Limitada (LLC – Limited Liability Company): Una LLC es también una entidad jurídica independiente de sus dueños (“Miembros”), cuya responsabilidad es limitada generalmente no excede su aportación de capital. Se organizan radicando un certificado de organización en el Departamento de Estado. Su nombre debe distinguirse de otras entidades registradas en el Departamento de Estado y debe contener las siglas CRL o LLC. Deben tener una oficina registrada y agente residente en Puerto Rico. Por defecto, las LLCs tributan como corporaciones, pero comúnmente eligen ser tratadas como entidades conducto (“Pass-through”) o entidades ignoradas (“Disregarded Entity”) para evitar la doble tributación. Sociedad (Partnership): Una sociedad es un contrato donde dos o más personas acuerdan aportar dinero o bienes para compartir ganancias. Existe cuando varios dueños no han formado una corporación o LLC. Si se aporta un bien inmueble, requiere escritura pública. Una sociedad termina si cambia la composición de los socios. Las fuentes no detallan la responsabilidad de los socios en esta estructura, pero en una sociedad general, los socios suelen ser conjuntamente y solidariamente responsables por las deudas de la sociedad. Nota importante Independientemente de la estructura, todo negocio en Puerto Rico debe cumplir con requisitos contributivos y regulatorios del IRS, Hacienda, CRIM, municipios, Departamento del Trabajo, Fondo del Seguro del Estado, OGPe, ASUME y otras agencias según la industria.No registrarse y pagar las contribuciones o permisos correspondientes pudiera tener muchisimos costos para el negocio, irrespectivo de su estructura. ¿Qué es una Marca y un Nombre Comercial? Ya que entendemos como un negocio puede operar en Puerto Rico, vamos a discutir que son marcas y nombres comerciales. Una marca (trademark) es un signo o medio signo distintivo que identifica productos o servicios en el mercado. Incluye marcas de fábrica, servicio, certificación y colectivas. Puede estar compuesta por palabras, nombres, frases, símbolos, sonidos, colores o combinaciones. Un nombre comercial (trade name) distingue la actividad comercial de una empresa frente a otras. Usar una marca otorga derechos limitados localmente, pero registrarla en la USPTO proporciona protección nacional. Beneficios clave de registrar una marca: Protección frente a marcas similares para productos/servicios relacionados en EE.UU. y Puerto Rico. Fortalece el valor comercial de la marca. Facilita expansión y licenciamiento. La búsqueda previa (“clearance search”) evita solicitudes rechazadas o conflictos. ¿Por qué registrar también en Puerto Rico? Aunque el registro federal se extiende a PR, el registro local refuerza la posición legal dentro de la jurisdicción, facilita procesos ante tribunales locales, y brinda mayor visibilidad en el entorno comercial puertorriqueño. También permite proteger nombres comerciales que no están cubiertos por la USPTO. ¿Dónde y Cómo Hacer la Búsqueda? Independientemente de la estructura que elijas, antes de usar o registrar un nombre o marca, realiza estas búsquedas: Departamento de Estado de Puerto Rico: En el Departamento de Estado hay que hacer dos búsquedas separadas: (1) Registro de Corporaciones y Otras
April 15 Tax Deadlines: What You Need to File Today (Puerto Rico & U.S. Overview)
Today is April 15, 2025, and if you haven’t already filed or extended your returns, you’re out of runway. Whether you’re a corporation, pass-through entity, employer, or individual — today is packed with federal and Puerto Rico tax deadlines that carry real consequences if missed. Here’s your rapid-fire breakdown of what’s due, where to file, and how to avoid penalties. Puerto Rico Tax Filings Due Today Income Tax Returns & Reports Withholding & Estimated Tax Payments Informative Returns Employer Responsibilities Additional Items U.S. Federal Tax Filings Due Today Quick Access Portals Final Word: File extension and Call Your CPA Immediately This isn’t a drill. You have multiple critical deadlines converging today. If you’re not 100% sure what applies to you — call your CPA immediately. Filing extensions are available in some cases, but tax payments are not excused by indecision. Don’t assume you’re covered — confirm it. Pay what’s due. File what’s required. Avoid interest, penalties, and surcharges to keep more of your money in your pocket.
El BOI Regresó, ¿qué hago?
Comprendiendo la Ley de Transparencia Corporativa y los Requisitos de Reporte de Información sobre Beneficiarios Finales ¿Qué es la CTA? La Ley de Transparencia Corporativa (CTA, por sus siglas en inglés) fue promulgada en 2021 con el propósito de combatir el lavado de dinero, el fraude fiscal y otras actividades financieras ilícitas. Esta ley exige que ciertas empresas en EE.UU. informen a la Financial Crimes Enforcement Network (FinCEN, por sus siglas en Inglés) sobre sus beneficiarios finales.La información recopilada se almacenará en una base de datos segura y solo será accesible a agencias gubernamentales autorizadas, como las fuerzas del orden y las entidades regulatorias. ¿Quién es un Beneficiario Final? Un beneficiario final es una persona que, directa o indirectamente: Posee o controla al menos el 25% de la empresa mediante acciones, derechos de voto, participación en capital o contratos que otorgan control. Ejerce un control sustancial sobre la empresa, lo que incluye funciones como CEO, CFO, Asesor Legal o miembro de la Junta de Directores. También se incluyen aquellas personas que tienen la autoridad para nombrar o remover altos ejecutivos o tomar decisiones clave en nombre de la empresa. ¿Quién debe presentar un Reporte de BOI? Las siguientes “empresas que informan” deben presentar un Reporte de BOI ante FinCEN: Corporaciones, compañías de responsabilidad limitada (LLC) y entidades similares registradas en EE.UU. (esta definición incluye a Puerto Rico). Una de las preguntas que provee FinCEN para determinar si hay que registrar la empresas incluye si se tuvo que registrar en el Departamento de Estado. Sin embargo, en Puerto Rico, de conformidad con la Ley Núm. 55-2020, conocida como el “Código Civil de Puerto Rico”, sociedades, sociedades especiales, fundaciones y otras asociaciones de personas de interés particular, sean civiles, mercantiles o industriales (que tradicionalmente no se hubiesen tenido que registrar en el Departamento de Estado para formarse) deberán ser registradas en el Registro de Personas Jurídicas administrado por el Departamento de Estado. Por lo cual, debido a las multas altas puede proceder con cautela y registrar el BOI. Empresas extranjeras que operan en EE.UU. y están registradas en cualquier estado o territorio. Exenciones: Hay 23 categorías de entidades exentas, entre ellas incluidas: Bancos Empresas que cotizan en bolsa. Instituciones financieras reguladas. Compañía y productores de seguros Organizaciones sin fines de lucro registradas como entidades exentas a nivel federal. Las organizaciones sin fines de lucro en Puerto Rico que no están registradas federalmente como exentas no califican para la exención correspondiente. Grandes empresas operadoras. Las grandes empresas operadoras en Puerto Rico generalmente no califican para la , ya que no presentan contribuciones federales a menos que tengan ingresos provenientes de EE.UU. Entidades inactivas Fechas Límite para Presentar el Reporte de BOI según la CTA La CTA establece plazos específicos dependiendo de la fecha de formación de la empresa: Empresas formadas antes del 1 de enero de 2024: Fecha límite: 1 de enero de 2025. Empresas formadas en 2024: Deben presentar su reporte dentro de los 90 días posteriores a su registro. Empresas formadas a partir del 1 de enero de 2025: Deben presentar su reporte dentro de los 30 días posteriores a su registro. Importante: Algunas fechas límite han sido modificadas debido a varias órdenes judiciales. Incertidumbre Legal y Drama Judicial En 2024 y 2025, hubo múltiples demandas y órdenes judiciales que afectaron temporalmente la aplicación de la CTA. Este drama judicial de cambia-cambia causó mucha incertidumbre. A continuación, un resumen de los casos más relevantes: National Small Business United v. Yellen (N.D. Ala.) 1 de marzo de 2024: Un tribunal en Alabama determinó que la CTA excedía la autoridad del Congreso y bloqueó su aplicación contra los demandantes. 11 de marzo de 2024: El Departamento de Justicia (DOJ) apeló la decisión. Actualmente, la CTA no se está aplicando a los demandantes en este caso, lo que incluye la National Small Business Association (NSBA) y sus miembros. Texas Top Cop Shop, Inc. v. Garland (E.D. Tex.) 3 de diciembre de 2024: Un tribunal en Texas emitió una orden judicial nacional bloqueando la aplicación de la CTA. 23 de diciembre de 2024: El Quinto Circuito levantó la orden judicial, permitiendo que la CTA entrara en vigor nuevamente. 27 de diciembre de 2024: Otro panel del Quinto Circuito reinstaló la orden judicial. 23 de enero de 2025: La Corte Suprema de EE.UU. suspendió la orden judicial, permitiendo la aplicación de la CTA mientras el caso sigue en litigio. Smith, et al. v. U.S. Department of the Treasury (E.D. Tex.) 7 de enero de 2025: Un tribunal en Texas emitió una orden judicial nacional bloqueando la CTA. 5 de febrero de 2025: El Departamento de Justicia apeló la decisión y solicitó la eliminación de la orden bloqueando el CTA. 18 de febrero de 2025: El tribunal suspendió su propia orden, permitiendo que la CTA entre en vigor mientras la apelación sigue en curso. Actualmente, hay múltiples apelaciones pendientes en el Undécimo, Noveno y Cuarto Circuito, incluyendo National Small Business United v. Yellen, Firestone v. Yellen y Community Associations Institute v. Yellen. Sin embargo, solo el caso National Small Business United otorgó alivio judicial a sus demandantes. Sanciones por Incumplimiento Dado que la CTA sigue vigente, las empresas deben cumplir con el reporte de BOI. FinCEN ha extendido los plazos para algunas compañías, permitiendo que aquellas creadas en o que debían radicar el BOI entre el 3 de diciembre de 2024 y el 18 de febrero de 2025 presenten su BOI antes del 21 de marzo de 2025.Las sanciones por incumplimiento incluyen: Multas civiles de $591 por día hasta corregir la violación. Multas penales de hasta $10,000 y prisión de hasta 2 años en caso de incumplimiento intencional. Nota: Cualquier cambio en la información sobre el beneficiario final debe informarse dentro de los 30 días posteriores a la modificación. ¿Qué Información se Requiere en un Reporte de BOI? Para presentar un reporte de BOI, las empresas deben proporcionar: Información de la Empresa: Nombre legal, nombres comerciales, dirección principal y número de identificación fiscal. Información de
BOI is back. Now what?
Note: Para la versión en español, favor haz clic aqui. BOI is back, now what? Understanding the Corporate Transparency Act (CTA) and Beneficial Ownership Information (BOI) Reporting Requirements What is the CTA? The Corporate Transparency Act (CTA) was enacted in 2021 to combat money laundering, tax fraud, and illicit financial activities. The law requires U.S. businesses to disclose information about their Beneficial Owners to the Financial Crimes Enforcement Network (FinCEN), a division of the U.S. Department of the Treasury. This information is stored in a secure database accessible only to authorized government agencies. Who is a BOI? Beneficial Ownership Information (BOI) refers to details about individuals who own or exercise significant control over a company. Under the CTA, a beneficial owner is someone who: Who Needs to File a BOI Report? Companies required to file a BOI report include corporations, limited liability companies (LLCs), and similar entities created through state registration. However, 23 types of entities are exempt, including publicly traded companies, banks, insurance companies, financial institutions, and certain nonprofits. Please note that the large operating companies exemption generally does not apply to Puerto Rico as they do not file federal taxes unless they have US-sourced income. Similarly, Puerto Rico non-for-profit companies that are not registered federally as exempt entities do not qualify for the tax-exempt entity exemption. BOI Filing Deadlines per CTA The CTA established the following filing deadlines depending on when a company was formed: However, the deadlines have shifted for some due to multiple legal actions filed. Legal Uncertainty: Multiple Injunctions and Appeals There was much drama regarding the applicable deadlines for the BOI reporting in 2024 and early 2025. Due to multiple injunctions issued by federal courts, there has been significant legal uncertainty surrounding the enforcement of the CTA. Here is a summary of the most relevant cases. Penalties for Non-Compliance Given these developments, FinCEN’s regulations implementing the BOI reporting requirements are no longer stayed, and compliance is now mandatory. However, FinCEN is providing additional time for companies to report. FinCEN advised that for most reporting companies, the new deadline for companies created between December 3, 2024, and February 18, 2025, to file an initial, updated, and/or corrected BOI report is now March 21, 2025. While it has not been explicitly clarified, per CTA any entity created on or after February 20, 2025, will have 30 days to file to file the BOI. Failure to comply with the BOI reporting requirements can result in severe penalties: Note: Changes to beneficial ownership must be reported within 30 days. Failure to update your BOI report could result in penalties. What Information is Required in a BOI Report? To file a BOI report, companies must submit the following details: Need Help Filing Your BOI Report? Avoid penalties and ensure compliance with FinCEN regulations by filing your BOI report on time. We provide professional assistance to make the filing process stress-free. Contact us today to handle your BOI filing quickly and accurately! Disclaimer This post provides general information and does not constitute legal advice. Consult with legal counsel before making any decisions based on this information. Accessing or using this post does not establish an attorney-client relationship between us.
🚨 Don’t Lose Your Deduction – File Your 480s on Time! 🚨
Tax Season Has Begun! Businesses and self-employed individuals in Puerto Rico must ensure they correctly and timely file their 480 Informative Returns in SURI, the online system of the Puerto Rico Department of Treasury. These forms are the local equivalent of the federal 1099 informational returns. They are essential for claiming deductions on your income tax return while avoiding unnecessary penalties of $500 per late-filed form. Key 480 Forms & Their Deadlines: 📌 480.6A – Reports payments not subject to withholding (e.g., rents, interest, royalties). Due: February 28📌 480.6B – Reports payments subject to withholding (e.g., certain interest, dividends subject to 15% withholding or incentives decrees). Due: February 28📌 480.6C – For payments made to non-residents that had withholding at source. Due: April 15📌 480.6SP – Reports professional service payments (whether subject to withholding or not). Due: February 28📌 480.7E – (Optional) Documents payments for advertising, insurance, telecom, internet, and cable TV. Due: The same deadline as your income tax return (April 15 or extension date). Why You MUST File 480.7E Even If It’s Optional Many businesses skip Form 480.7E because it’s not mandatory, but failing to file it means you won’t be able to deduct these expenses on your income tax return for alternative basic tax or alternative minimum tax. If your business incurs costs for advertising, insurance, telecommunications, internet, or cable services, this form is necessary to secure your deduction. Key Filing Rules 🗓 Deadline to File: Forms must be submitted electronically via SURI. Recipients must receive their copy within 7 days after submission.🔹 If filing more than 2,000 forms, use a text file format.🔹 Otherwise, use Excel or manual entry in SURI. 📢 Don’t Overpay Hacienda! Failing to file your 480s can impact your deductions. February 28 is less than two weeks away. Make sure you have the legal name, address, and EIN/SSN of your suppliers and service providers. This information can be obtained through a W-9 or W-8BEN-E (yes, these are U.S. forms, but they are used in PR since the EIN and SSN are federally issued). If you don’t have this information yet, there’s still time—reach out and request it from your suppliers and service providers. Don’t leave money on the table! 🚨 Quieres reducir lo que le pagas a Hacienda ¡No pierdas tu deducción! Presenta tus 480s a tiempo 🚨 ¡La temporada de contributiva comenzó! Las empresas e individuos que hacen negocios por cuenta propia en Puerto Rico deben asegurarse de presentar correctamente y a tiempo sus Declaraciones Informativas 480 en SURI del Departamento de Hacienda de Puerto Rico. Estas informativas son el equivalente local de las declaraciones informativas federales 1099 y son fundamentales para reclamar deducciones en la planilla de contribución sobre ingresos, evitando multas innecesarias de $500 por informativa presentada tardiamente. Formularios 480 clave y sus fechas límite: 📌 480.6A – Reporta pagos no sujetos a retención (ej. rentas, intereses, regalías). Vence: 28 de febrero📌 480.6B – Reporta pagos sujetos a retención (ej. ciertos intereses, dividendos sujetos a retención del 15% o decretos de incentivos). Vence: 28 de febrero📌 480.6C – Para pagos realizados a no residentes con retención en la fuente. Vence: 15 de abril📌 480.6SP – Reporta pagos por servicios profesionales (ya sea con o sin retención). Vence: 28 de febrero📌 480.7E – (Opcional) Documenta pagos por publicidad, seguros, telecomunicaciones, internet y televisión por cable. Vence: el mismo día que la planilla de contribución sobre ingresos (15 de abril o la fecha de extensión). ¿Por qué DEBES presentar el Formulario 480.7E aunque sea opcional? Muchas empresas omiten el Formulario 480.7E porque no es obligatorio. Sin embargo, no presentarlo significa que no podrás deducir estos gastos en tu planilla de contribución sobre ingresos para el contribución básico alterna (CBA) o el contribución alternativa mínima (CAM). Si tu negocio incurre en gastos de publicidad, seguros, telecomunicaciones, internet o televisión por cable, este formulario es esencial para asegurar tu deducción de gastos de tu industria o negocio. Reglas clave para la radicación 🗓 Fecha límite de presentación: Las informativas deben presentarse electrónicamente a través de SURI. Los contribuyentes deben recibir su copia dentro de los 7 días posteriores a la radicación. 📢 ¡No le pagues demás a Hacienda! La falta de radicación de 480s puede afectar tus deducciones. El 28 de febrero está a menos de 2 semanas. Asegúrate de tener el nombre legal, dirección y EIN/SSN de tus suplidores y proveedores de servicios, información que puedes obtener a través de un W-9 o W-8BEN-E (sí, son formularios de EE.UU., pero se utilizan en PR ya que el EIN y el SSN son emitidos a nivel federal). Si no lo tienes hay tiempo, escribe y solicita esta información de tus suplidores y proveedores de servicios. ¡No dejes dinero en la mesa! Siguenos para más contenido sobre cumplimiento con las leyes de Puerto Rico y como operar tu negocio eficientemente.