United States Virgin Islands: IRS Colonialism

A few weeks ago I wrote: "Colonialism has also been described as a stronger country exploiting a weaker one. That's exactly what the U.S. Internal Revenue Service is currently doing to the U.S. Virgin Islands."

I went on to explain that under a unique special federal income tax arrangement applying only to the USVI, it is possible for U.S. nationals and others who make the islands their main residence to enjoy substantially reduced income and corporate taxes compared to mainland United States.

That's because to attract investment and help the poor island economy, the USVI government grants generous tax relief packages. These include a 90% exemption on corporate U.S. federal income taxes for USVI chartered corporations, partnerships and limited liability companies.

Owners of USVI entities who are bona fide residents and meet certain other qualifications are eligible for a 90% exemption on taxes on income these entities produce. Because the USVI has no state or local income tax, bona fide residents pay an effective U.S. federal income tax rate of just 3.5%. That has drawn wealthy Americans residents from the mainland and created a sustained economic mini-boom.

My reason for raising this issue, then and now, has been a highhanded attack by the IRS on the citizens of the Virgin Islands -- an IRS distortion of the tax laws that seeks to hold people accountable for alleged taxes owed without any regard to the statutory three-year limit on such claims.

Whenever I need advice on tax matters in the USVI I turn to one of the islands' leading tax attorneys, Marjorie Rawls Roberts. She has published an authoritative article in the current issue of Offshore Investment and you can read all about that, and the possibilities this American tax haven may hold for you. Click here LINK: http://www.offshoreinvestment.com/current_issue/comment182.html

* To find out all about places where you may be able to lower or avoid taxes completely, click here http://web-purchases.com/190STHOW/W190H723/