Defensive Guide to the Planilla: Protect Your Act 60 Decree

Your Planilla is not just a tax form; it's your first line of defense in an audit. This section provides a strategic, line-by-line guide to completing your return with audit defense in mind. We will emphasize the importance of meticulous record-keeping for every number you report, from your 4% export service income to your exempt capital gains. We'll discuss how to structure your schedules and annexes to present a clear, unambiguous, and defensible narrative of your financial activities. The goal is to create a filing so robust that it preemptively answers the questions an auditor might ask. This proactive stance is critical for anyone serious about protecting their assets and their decree.

The most aggressive audit attacks target the bona fide residency status of Act 60 holders. This section moves beyond the basic 183-day rule and into the granular details of building an irrefutable residency case. We will provide actionable strategies for documenting your tax home and closer connection to Puerto Rico, referencing the stringent tests under IRC Section 937. This includes guidance on consolidating your financial life on the island, from banking and investments to personal and professional affiliations. We will also address the record-keeping requirements necessary to survive an audit, a topic highlighted in the recent GAO report (GAO-26-107225) on Act 60 compliance. Your defense is only as strong as your documentation.

The IRS has publicly announced Campaign 685, a targeted audit initiative focused on high-income individuals who have claimed benefits in Puerto Rico without meeting the legal requirements. This is not a routine audit cycle; it is a focused attack. This section explains what the campaign entails and how to prepare your Planilla to withstand this heightened level of scrutiny. We will discuss the importance of a clean paper trail, consistent reporting across all US and PR filings (such as FBAR and Form 8938), and the critical role of a second opinion in identifying vulnerabilities before the IRS does. In a market where many decree holders rely on informal advice, taking a formal, defensive posture is the only way to ensure your financial shield holds firm.