Defend Your Act 60 Partnership Income | Act 60 Shield

Fortifying Your Income Sourcing Against IRS Challenges

The IRS is actively challenging the income sourcing of Act 60 decree holders. An incorrect determination that your partnership income is U.S.-sourced could invalidate your tax benefits. Our service is designed to help you build a defensible position for your PR-sourced income. We review your partnership's activities and documentation through the lens of a potential IRS audit, identifying weaknesses and areas for fortification. This proactive defense strategy is crucial for withstanding scrutiny, especially for partnerships with operations both inside and outside of Puerto Rico. We help you prepare the necessary documentation to substantiate your sourcing claims, as outlined in guidance like GAO Report GAO-26-107225.

Audit-Proofing Your Schedule K-1 Reporting

Your Schedule K-1 is a primary target for auditors. Discrepancies between your K-1 and your other filings can trigger a full-blown examination. Act 60 Shield provides a pre-audit review of your K-1 reporting, designed to identify and address red flags before the IRS does. We focus on high-risk areas, such as the proper application of basis limitations, at-risk rules, and the character of income reported. Our process is designed to give you the confidence that your K-1 reporting is consistent, accurate, and ready to withstand an audit. This is not just a review; it's a critical part of your personal compliance defense strategy.

Preparing for Inquiries on Complex Partnership Structures

Complex partnership structures involving carried interests, preferred returns, or multi-tiered entities are magnets for IRS attention. If you are a partner in such an entity, you must be prepared to defend your tax treatment. Act 60 Shield helps you prepare for detailed inquiries into these complex areas. We can help you document the economic substance of your arrangements and ensure your reporting aligns with both the letter of your partnership agreement and the intricate web of tax law. By preparing a defense in advance, you can respond to IRS inquiries with confidence and authority, rather than reacting under pressure. This is the level of preparation serious decree holders demand.

Frequently Asked Questions

What is IRS Campaign 685 and how does it relate to partnership income?

IRS Campaign 685 is a targeted effort to examine high-income individuals who may be erroneously claiming Act 60 benefits, with a focus on income sourcing. Partnership income is a key area of this campaign, as the sourcing rules can be complex and are often misapplied. A proactive defense is the best way to prepare for this heightened scrutiny.

Can you guarantee I won't be audited?

No one can guarantee you won't be audited. However, our service is designed to help you build a robust and defensible tax position, which can significantly reduce the risk of a negative audit outcome. We help you prepare for the fight, should it come.

Is this service the same as hiring a tax attorney for an audit?

No. Act 60 Shield is a preparatory service designed to identify and fortify potential weaknesses in your tax filing before an audit occurs. If you are under active audit, you should engage a qualified tax attorney. Our service is designed to be a proactive measure to strengthen your position long before that becomes necessary.

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Shield Your Act 60 Partnership Income from Audits