Ferraiuoli has extensively advised and represented clients before the Puerto Rico Treasury Department, the Internal Revenue Service, the Puerto Rico Tourism Company, and the Department of Economic Development and Commerce, and multiple municipalities regarding tax controversies. Our attorneys are experienced in all aspects of the tax audit, related administrative appeals process, and local court proceedings. In addition, our attorneys are able to successfully negotiate Closing Agreements and Payment Compromises with the Puerto Rico Treasury Department and Municipalities to establish agreements as to the final tax treatment to be accorded by the Government of Puerto Rico to particular transactions or situations. Our Tax Department is also experienced in obtaining private letter rulings that clarify the tax treatment of proposed transactions.
Most of our tax attorneys are certified public accountants, have business or government backgrounds that are critical to successfully advising clients on federal and local tax issues that affect companies operating in Puerto Rico.
Representative Matters and Transactions
- Successfully represented multiple clients in tax audits and administrative appeals, including (i) validity of administrative fines and penalties imposed in connection with the state and use tax; (ii) validity of administrative fines and penalties imposed in connection with liqueur licenses and public shows; (iii) applicability of statute of limitations to over $600,000 in outstanding tax debts; (iv) cancelations of liens on real and personal assets; (v) waiver of estate tax liens on properties; (vi) improperly executed waivers to the statute of limitations rules; (vii) taxation of software transactions; and (viii) income tax deficiencies assessed by the Puerto Rico Treasury Department.
- Successfully represented multiple clients in municipal tax audits and administrative appeals.
- Assisted a multinational pharmaceutical company in the shutdown of its Puerto Rico operations by designing and implementing a strategy to settle all outstanding Puerto Rico and municipal tax matters through the negotiation and execution of closing agreements with the Puerto Rico Treasury Department and the municipality.
- Obtained multiple private letter rulings establishing the Puerto Rico tax treatment of (i) corporate reorganizations; (ii) change of tax elections from corporation to partnership; (iii) tax treatment of employee stock option plans; (iv) certification of tax credits; and (iv) applicability of partnership tax provisions to international entities registering to conduct business within Puerto Rico; and (v) tax qualification of retirement and benefit plans and programs for employers in Puerto Rico.
- Negotiated multiple closing agreements establishing the Puerto Rico tax liabilities of multiple taxpayers, covering issues such as (i) voluntary disclosure of unpaid tax debts related to income taxes, sales and use taxes, and withholding taxes; (ii) employee misclassification; (iii) changes in accounting methods; (iv) current and liquidating dividend distributions; (v) tax withholdings on payments to non-residents of Puerto Rico; (vi) international entertainment events held in Puerto Rico; (vii) non-resident A-list talent participating in Puerto Rico events; and (vii) chartering of planes for the transportation of passengers to and from Puerto Rico.
