The Puerto Rico Treasury Department has referred three tax evasion cases to the Justice Department against corporations who failed to pay more than $3.6 million, Treasury Secretary Melba Acosta said Wednesday.
She also announced the start of a media campaign against sales and use tax (known as IVU for its initials in Spanish) evasion and the hiring of additional staff to monitor related activities.
“We’re heading off tax evasion from multiple angles: promoting legislation to streamline Treasury’s monitoring efforts; strengthening Treasury’s oversight division; recruiting more inspectors, agents and special staff; conducting focused interventions on businesses that evade paying IVU; researching and referring cases to the Justice Department; collaborating and exchanging information with federal authorities; and raising awareness among the debtors about their responsibilities and guiding them about the penalties that may apply for failure to comply with their obligations under the Internal Revenue Code,” Acosta said.
Crimes committed by the unidentified corporate taxpayers referred to Justice include serious Internal Revenue Code violations, including evading IVU payments, withholding payroll taxes on wages without referring them to Treasury and failure to file income tax returns, even when the taxpayer accrued taxable income, she said.
“One of the corporations referred to Justice is a fast-food establishment operator in major malls. Another corporation is a retailer in Plaza Las Américas,” she said. “Those are the first reported cases of 200 notifications Treasury sent out in June to the largest debtors. The other investigations remain open,” Acosta said.
“Meanwhile, the third largest referred contributor is a corporation offering security services, which did not file certain income tax returns even when they accrued taxable income,” she said.
The fast-food retailer broke tax code stipulations between 2008 and 2012, when they filed IVU tax returns and quarterly employer returns but failed to remit the money collected to Treasury, which failed to receive more than $1.1 million in revenue. A similar scenario was outlined for the retailer, she said.
To spread the word on the consequences of evading IVU tax payments, Treasury is launching a multi-media campaign this week. Failing to remit IVU collections is punishable with jail time, she said.