• videocam Live Webinar with Live Q&A
  • calendar_month July 14, 2026 @ 1:00 PM ET/10:00 AM PT
  • signal_cellular_alt Intermediate
  • card_travel Tax Law
  • schedule 90 minutes

2026 Puerto Rico Tax Act Compliance: IRS Audits, Key Issues for Taxpayers

Treatment of Puerto Rico-Sourced Income, Puerto Rico Act 60 Benefits, Act 38-2026, Residency Requirements

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About the Course

Introduction

This CLE/CPE course will provide persons who have taken advantage of Puerto Rico Act 60 and their tax advisers with guidance on managing an IRS examination and audit on grantees. The panel will also discuss the favorable treatment for Puerto Rico-source income and areas of likely scrutiny that will inform the IRS audit initiative. The webinar will also detail residency requirements, address modifications made under Puerto Rico Act 38-2026, and outline potential caveats to U.S. taxpayers considering relocation to Puerto Rico for tax purposes.

Description

With the enhanced focus on offshore tax avoidance, the IRS continues its audit campaign for Puerto Rico Act 60 (formerly Act 20 and 22) grantees. Taxpayers and their advisers must identify potential audit risks and properly advise taxpayers on how to take advantage of both the Internal Revenue Code and Puerto Rico tax laws. Our panel will feature experts on both the U.S. rules affecting bona fide residents of Puerto Rico and on responding to IRS audit campaigns.

Generally, IRC Section 933 exempts bona fide residents of Puerto Rico from U.S. federal income tax on any Puerto Rico-source income. IRC Section 937 sets the threshold for establishing bona fide residency in Puerto Rico (and some other U.S. possessions) and contains rules for determining Puerto Rico-source income.

Puerto Rico has several tax provisions under Act 60 designed to attract investors and business owners to relocate to the island. The two key provisions were Act 20 (Export Services Act) and Act 22 (Individual Investors Act). Act 20 sets a maximum income tax rate of four percent on the net profits of any business exporting services from Puerto Rico to companies or individuals outside the island. Act 22 exempts from income tax all passive income derived by bona fide residents of Puerto Rico. When taken in combination, these provisions create tax incentives virtually unmatched by any foreign jurisdiction for tax savings without causing individuals to incur the expropriation tax.

In addition, recently passed Act 38-2026 updates the eligibility rules, tax rates, and extends the 2036 sunset of these Act 60 benefits to 2055.

Listen as our expert panel provides a practical guide to the tax opportunities and challenges of relocating to Puerto Rico and handling potential IRS audits.

Credit Information

  • This 90-minute webinar is eligible in most states for 1.5 CLE credits.

  • CPE credit is not available on recordings.

  • BARBRI is a NASBA CPE sponsor and this 90-minute webinar is accredited for 1.5 CPE credits.

  • BARBRI is an IRS-approved continuing education provider offering certified courses for Enrolled Agents (EA) and Tax Return Preparers (RTRP).


  • Live Online


    On Demand

Date + Time

  • event

    Tuesday, July 14, 2026

  • schedule

    1:00 PM ET/10:00 AM PT

I. Overview of Puerto Rico Act 60

II. Puerto Rico Act 38-2026 modifications to Act 60

III. IRC provisions specific to Puerto Rico and certain U.S. territories and possessions

A. Section 933

B. Section 937 special residency rules

C. IRS notice requirements

IV. Establishing residence

V. Determining the limits of Puerto Rico-source income

VI. Likely areas of audit and disagreement

The panel will review these and other relevant topics:

  • The impact and focus of the IRS audit campaign for Puerto Rico Act 60 grantees
  • How Internal Revenue Code provisions and Puerto Rico local tax statutes provide an alternative tax haven to expatriation for certain high net worth taxpayers
  • Specifics of Puerto Rico's Act 20 (Export Services Act) and Act 22 (Individual Investors Act) as vehicles for attracting U.S. mainland-based taxpayers to relocate to Puerto Rico
  • Impact of Act 38-2026 modifications
  • Timing, notice, and qualification requirements to claim tax benefits
  • Best practices to avoid or minimize the chances of being subject to IRS examination


Learning Objectives

After completing this course, you will be able to:

  • Recognize potential audit risks based on the focus on IRS audit campaigns for Puerto Rico Act 60 grantees
  • Differentiate residency requirements for claiming tax benefits by relocating to Puerto Rico as opposed to foreign income exclusion
  • Discern the benefits for high net worth taxpayers of relocating to Puerto Rico as an alternative to expatriation for tax purposes
  • Identify the specific requirements to claim the four percent income tax rate for exported services under Puerto Rico's Act 60
  • Recognize potential drawbacks to relocating to Puerto Rico for tax purposes
  • Field of Study: Taxes
  • Level of Knowledge: Intermediate
  • Advance Preparation: None
  • Teaching Method: Seminar/Lecture
  • Delivery Method: Group-Internet (via computer)
  • Attendance Monitoring Method: Attendance is monitored electronically via a participant's PIN and through a series of attendance verification prompts displayed throughout the program
  • Prerequisite:

    Three years+ business or professional experience at mid-level within the organization, preparing complex tax forms and schedules. Specific knowledge and understanding of international taxation, and residency rules for foreign earned income exclusion. Familiarity of Puerto Rico tax incentives for exporters and investors.

BARBRI, Inc. is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of Accountancy have final authority on the acceptance of individual courses for CPE Credits. Complaints regarding registered sponsons may be submitted to NASBA through its website: www.nasbaregistry.org.

IRS Approved Provider

BARBRI is an IRS-approved continuing education provider offering certified courses for Enrolled Agents (EA) and Tax Return Preparers (RTRP).

BARBRI CE webinars-powered by Barbri-are backed by our 100% unconditional money-back guarantee: If you are not satisfied with any of our products, simply let us know and get a full refund. Contact us at 1-800-926-7926 .