The Foundation of Compliance: What Records to Keep
DDEC and IRS Scrutiny: Retention Policies and Best Practices
The High Cost of Non-Compliance: Lessons from GAO Reports
Frequently Asked Questions
What are the most common record-keeping mistakes for Act 60 holders?
The most common mistakes include failing to maintain a detailed, contemporaneous log of days spent in Puerto Rico, commingling personal and business funds without clear accounting, and not keeping sufficient proof of the source of income for services performed on the island. Another frequent error is neglecting to retain records for the required six-year period.
How long must I retain my records for Act 60 purposes?
You should retain all tax-related records for at least six years from the date you file your tax return. For records related to property or investments, such as purchase documents and improvement receipts, you should keep them for as long as you own the asset, plus six years after you sell it.
Does digital record-keeping meet the requirements?
Yes, digital copies of records are generally acceptable to both the IRS and the Puerto Rico Hacienda, provided they are legible and complete. It is a highly recommended best practice to digitize all your physical documents and store them securely in a cloud-based system to prevent data loss and ensure easy access.
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This content is for informational purposes only and does not constitute tax, legal, or accounting advice.