US Tax Law & How it Applies in Puerto Rico with Peter Palsen

The Essential Tax Podcast with Mishkin Santa, Episode 5 In this episode of The Essential Tax Podcast, Mishkin Santa talks with Peter Palsen, International Tax Professional at Frost Law. With over thirty years in international tax, Peter has extensive experience from his roles at a Big 4 firm and major U.S. multinationals, specializing in cross-border tax issues and key global markets. Tune in for these key takeaways: * Generative AI and IRS Efficiency: Peter Palsen discusses how generative AI could enhance IRS efficiency by improving audits, but he emphasizes concerns about balancing this with potential increased scrutiny. * Puerto Rico Tax Incentives: Peter Palsen highlights Puerto Rico’s Act 60 tax incentives, but notes that few U.S. citizens benefit due to complex residency requirements. * Challenges with Bona Fide Residency: Peter Palsen emphasizes the difficulty of establishing bona fide residency in Puerto Rico due to complex requirements that lead to confusion and need for specialized advice. * IRS Campaigns and Enforcement: Peter Palsen goes over the IRS’s Act 22 compliance campaign, noting initial high-profile actions but also highlighting ongoing challenges in managing and enforcing compliance. * IRS Efficiency and COVID-19 Impact: Peter Palsen discusses how COVID-19 and staffing increases have affected IRS efficiency, with a continued low audit rate reflecting broader challenges in service and enforcement. Learn more about Peter Palsen:  * Connect with Peter on LinkedIn: https://www.linkedin.com/in/peter-palsen-aa618245   * Learn more about US tax law and how it applies in Puerto Rico on Frost Law’s YouTube Channel: https://youtu.be/vgem_cBXT50?si=BtHRRYTmj_TU9Ghg  * Visit Frost Law’s website: https://askfrost.com  * Follow Frost Law on LinkedIn: https://www.linkedin.com/company/frostlaw Resources:   * Financial Times Article on Generative AI - https://ig.ft.com/generative-ai/  * Video on deep-diving on neural networks (16m views): https://www.youtube.com/watch?v=aircAruvnKk&t=22s Peter Palsen YouTube Videos:  * Basics: https://www.youtube.com/watch?v=V0i44o4mqfg&t=1066s  * Influence of PR tax law conclusions on mainland tax determinations (focused on crypto): https://www.youtube.com/watch?v=V0i44o4mqfg&t=1066s  * IRS LB&I International Compliance Campaign (Puerto Rico): https://www.irs.gov/businesses/small-businesses-self-employed/irs-lbi-compliance-campaigns-january-27-2021  * IRC 933 (Income from sources within Puerto Rico): https://www.law.cornell.edu/uscode/text/26/933  * IRC 937 (Residence and source rules involving possessions): https://www.law.cornell.edu/uscode/text/26/937  * IRS Form 8898: https://www.irs.gov/forms-pubs/about-form-8898  * November 2023 Letter from Congress to IRS about Puerto Rico Tax: https://velazquez.house.gov/media-center/press-releases/velazquez-leads-12-members-requesting-information-act-22-tax-evaders  * Article on the May 2024 Whistleblower Puerto Rico Tax Audits: https://www.nysscpa.org/news/publications/the-trusted-professional/article/irs-whistleblower-claims-agency-lags-in-investigating-puerto-rico-tax-break-abuse-052924  * Nexia Puerto Rico Tax Firm (Galindez LLC): https://galindezllc.com *********************************** Watch or listen to more episodes of The Essential Tax Podcast:  * https://www.youtube.com/@TheWolfGroupPC  * Apple: https://podcasts.apple.com/us/podcast/the-essential-tax-podcast/id1754660944  * Spotify: https://open.spotify.com/show/2beZfOpwfBlBgWHlNelAOf Connect and learn more from your host, Mishkin Santa:  * Connect with Mishkin on LinkedIn: https://www.linkedin.com/in/msanta  * Follow The Wolf Group, P.C. on LinkedIn: https://www.linkedin.com/company/the-wolf-group-pc  * Read Mishkin’s bio on Wolf Group, P.C.’s website: https://thewolfgroup.com/our-people/mishkin-santa