(St. Croix, VI, September 26, 2006) — Speaking before the House Ways and Means Committee Subcommittee on Select Revenues, Delegate to Congress Donna M. Christensen called Internal Revenue Services practices in the territory since the passage of the American Jobs Creation Act “intrusive” and a barrier to investment in the Virgin Islands.  “These heavy handed practices have been damaging to the Territory’s EDC program, raising the specter of guaranteed and endless audits of virtually anyone who moves to and invests in the Virgin Islands,” Christensen said.

The Delegate denounced the recent General Counsel Advisory Memorandum, where the IRS announced its new position that it has the right to audit the returns of a V.I. taxpayer as far back as they like and if they determine under the subjective pre-Jobs Act test that the taxpayer was not a bona fide V.I. resident, that it can assess full tax and penalties even if the taxpayer has paid the correct amount to the Virgin Islands.  Christensen said that this could make Virgin Islands taxpayers “subject to double taxation.”

In addition to calling attention to the IRS practices, Christensen called on the Congress to clarify that consistent with the language and intent of the 1986 Tax Reform Act that the filing of a tax return by a bona fide resident of the Virgin Islands with the local Bureau of Internal Revenue (BIR) starts the running of the statute of limitations in both the Virgin Islands and the United States and that those who filed returns in good faith should be credited for any tax paid to the BIR.

The Delegate also testified in favor of her bill, H.R. 273 that would permanently repeal the cap on rum revenues to the Virgin Islands and Puerto Rico.  Both the repeal of the cap on rum revenues and the revitalization of the territory’s economic development incentive program remain priorities for Delegate Christensen.