Fortify Your Act 60 Defense: A Guide for Tech Entrepreneurs

The IRS has launched Campaign 685 to specifically target Act 60 decree holders, and tech companies are a prime focus. Auditors are closely examining income sourcing, transfer pricing, and the economic substance of Puerto Rico operations. Act60Shield is designed to fortify your defense by stress-testing your compliance against the very tactics used by auditors. We review your documentation to ensure it can withstand scrutiny, helping you build a protective shield around your business. In an environment where most decree holders find help through word-of-mouth, our systematic approach provides a level of preparedness that is essential for serious entrepreneurs.

Your IP is your most valuable asset, and it's also a major audit risk. The IRS and Hacienda are challenging the sourcing of IP-related income, demanding rigorous proof that value was created in Puerto Rico. Act60Shield helps you prepare for this challenge by reviewing your IP development records, licensing agreements, and transfer pricing studies. Our service is designed to identify weaknesses in your position before an auditor does, giving you time to strengthen your documentation. This proactive defense is critical, as a negative audit finding could not only result in back taxes and penalties but could also jeopardize your decree.

How you handle stock options and equity grants is another area under the microscope. Auditors are looking for errors in the sourcing of gains from equity compensation, particularly for founders and key employees who moved to Puerto Rico. Act60Shield provides a deep dive into your equity plans, examining grant dates, vesting schedules, and exercise documentation to ensure they align with Act 60 rules. We help you prepare a clear and defensible position on why your equity-related gains qualify for preferential tax treatment. By taking compliance seriously now, you can protect your personal wealth and the future of your company.