Jonathan Strong
The Daily Caller
4/4/2011
The Obama administration says it can’t decide whether U.S. taxpayers should be on the hook for $6 billion in tax increases levied by Puerto Rico, but businesses are eligible for the disputed tax credits in the meantime.
And, if the IRS eventually decides the credits were improper, those firms won’t have to pay back the billions of dollars they already received.
As reported by The Daily Caller in January, critics have charged the highly unusual arrangement would comprise an indirect bailout that lets Puerto Rico bolster its sagging fiscal state by levying taxes on international firms those firms don’t actually have to pay.
The IRS is deciding whether to approve the tax credits or deem it a “soak up tax” that targets firms which can offset their tax increases with U.S. tax credits.
Then, a decision was supposed to come any day, but the IRS shirked from the controversy, waiting three months before quietly announcing last week it is not making a final decision.
“The provisions of the Excise Tax are novel. The determination of the creditability of the Excise Tax requires the resolution of a number of legal and factual issues,” the IRS said in a notice issued last week…
The article continues at The Daily Caller.
