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Protect Your Act 60 Intellectual Property Income

Your intellectual property is one of your most valuable assets. Under Act 60, it's also one of the most scrutinized. With the IRS ramping up its Campaign 685 audits, now is the time to build a formidable defense for your IP income sourcing and holding structures. Act 60 Shield is built for decree holders who take compliance seriously.

Protect Your Act 60 Intellectual Property Income

Fortify Your IP Income Sourcing Against Audits

In an audit, the burden of proof is on you to demonstrate that your IP income is genuinely Puerto Rico-sourced. We help you build that proof. Our service is designed to pressure-test your sourcing position, identifying weak points and providing a clear roadmap for remediation. We document the 'where, when, and how' of your IP usage, creating a defensive file designed to withstand scrutiny from both the IRS and Hacienda. This proactive approach is your first line of defense.

Royalty Structures Built for Defense

Ambiguity is the enemy of compliance. Vague licensing agreements or poorly documented royalty streams are prime targets for auditors. Act 60 Shield focuses on ensuring your royalty and IP licensing agreements are ironclad. We review your documentation for clarity, consistency, and alignment with Act 60 regulations. This isn't just about checking boxes; it's about creating a structure that is clear, defensible, and built to protect your assets from challenge.

Preparing Your IP Holding Entity for IRS Scrutiny

The IRS is actively targeting U.S. persons who use Puerto Rican entities to avoid U.S. tax on U.S.-sourced income. As the GAO report (GAO-26-107225) made clear, substance and transfer pricing are key focus areas. Act 60 Shield provides a rigorous review of your IP holding entity to ensure it has the necessary economic substance and that all related-party transactions are at arm's length. We help you prepare the documentation needed to defend your structure before you ever receive an audit notice.

Frequently Asked Questions

My IP was developed in the U.S. before I moved to Puerto Rico. Is that a problem?

It can be. This creates a 'pre-move appreciation' issue that auditors are trained to spot. Our review is designed to assess this specific scenario and help you develop a strategy for defending the allocation of income generated after your move to Puerto Rico.

What kind of documentation do I need to defend my IP sourcing?

You need robust documentation showing where your IP is being used. This can include server logs for software, distribution agreements for media, and detailed user data. We help you identify and assemble the specific evidence required for your situation.

Is Act 60 Shield a law firm?

No. We are a compliance and risk mitigation service. We do not provide legal advice. Our service is designed to prepare you for an audit and to work in concert with your legal and tax advisors to build the strongest possible defense for your decree.

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Related Topics

act 60 hacienda audit defenseirs campaign 685 explainedact 60 transfer pricing rulesact 60 record keeping requirements

This content is for informational purposes only and does not constitute tax, legal, or accounting advice.