Treasury: 32 Palmas del Mar businesses fined $373K

Written by  //  March 25, 2014  //  Government  //  No comments

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To catch IVU evaders, Treasury set up a confidential service through which citizens could blow the whistle on businesses that failed to provide a sales receipt or act irregularly during a transaction. (Credit: © Mauricio Pascual)

To catch IVU evaders, Treasury set up a confidential service through which citizens could blow the whistle on businesses that failed to provide a sales receipt or act irregularly during a transaction. (Credit: © Mauricio Pascual)

Thirty-two businesses operating in the upscale Palmas del Mar community in Humacao are facing a collective $373,000 in fines for failing to remit sales and use tax (known as IVU in Spanish) payments to the agency. The fines were issued late last week during a Treasury Department sweep.

“A total of 30 Internal Revenue agents participated in a sweep this weekend, addressing the complaints received mainly through the IVU Alert System,” Treasury Secretary Melba Acosta-Febo said, explaining that the agents made ​​undercover purchases in some of the charged business to verify the information.

“As part of the operation, Treasury agents checked that businesses had current licenses, including liquor permits as well as retailer registrations,” she said.

IVU Alert is a public participation system that the Treasury Department runs to give citizens a way to submit confidential complaints against businesses that fail in any way with the regulations relating to IVU collection and payment procedures.

While the agency refrained from revealing the names of the businesses fined, Acosta-Febo said they included restaurants, doctors and lawyers offices, grocery stores and other service providers in the marina area.

Aside from the proceedings at Palmas del Mar, Treasury conducted another undercover operation during which it fined three San Juan metropolitan area restaurants for failing to use the point of sale device, failing to record the transaction or generating the IVU Loto receipt. Each restaurant was fined $20,000.

Furthermore, earlier this month, 10 food establishments and seven gas stations were fined a combined $340,000, Acosta-Febo said.

All told, the agency has written up $773,000 in fines in recent weeks.

“We’re standing firm in our fight against tax evasion and will continue conducting this type of effort, to which we’ve added undercover operatives to make sure businesses are complying with applicable rules as IVU retaining agents,” she said. “Our work doesn’t end with the fine. Depending on the case, businesses are summoned by the agents and/or are referred to audits to detect if there is income tax evasion, misappropriation or breach the obligation to collect and remit the IVU as a withholding agent.”

After the investigation, the cases will be submitted to the appropriate administrative and judicial forums, she said.

Last year, the IVU Alerts system received 5,534 confidential tips that were followed, resulting in $4.3 million in fines. So far this year, the system has received 2,813 complaints, of which 1,868 have been investigated, prompting more than $5.1 million in fines, according to the Treasury Department.

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