Big Law’s Puerto Rico Plan Sparks IRS Scrutiny

The Senate’s top Democrat on the Finance Committee has called for an investigation by the IRS into tax advice given by two large law firms. He points to a strategy that lets wealthy clients claim Puerto Rico residency and avoid more than $100 million in U. S. taxes. The request targets opinions written by partners from a Miami office of Winston & Strawn LLP. Wyden urges the IRS’s chief of tax compliance, Jarod Koopman, to examine whether those opinions were accurate and appropriate.The issue highlights how complex tax rules can be used to reduce liabilities for a few high‑net‑worth individuals. It also raises questions about the role of law firms in shaping tax policy through client advice. If the IRS finds wrongdoing, it could lead to changes in how residency status is verified. The case may also prompt lawmakers to tighten rules on tax planning that exploits territorial benefits.