International Issues Affecting Retirement Plans

The Internal Revenue Service (IRS) offers material on its website about international issues affecting retirement plans in the U.S.

International issues, including international tax compliance by large corporations and wealthy individuals, are a priority, according to the IRS. Through its Office of Employee Plans, the IRS says it is focused on addressing existing tax-related abuse, as well as preventing abuse.

To that end, the IRS website offers material about retirement plans in both Puerto Rico and the U.S. Virgin Islands. The material for Puerto Rico covers basic facts about the relationship between the U.S. and Puerto Rico concerning retirement plan qualification, and filing requirements and technical guidance (e.g., Revenue Ruling 2011-1). A questions-and-answers section covers topics such as: 

  • Can the IRS audit Puerto Rican retirement plans?; 
  • Are plan sponsors liable for Internal Revenue Code (IRC) excise taxes?; and 
  • What is the tax effect if Puerto Rican plans fail any qualification requirements?

The material for the U.S. Virgin Islands includes a retirement plan comparison chart, as well as a questions-and-answers section on topics including: 

  • Which IRC sections apply to U.S. Virgin Islands retirement plans?; 
  • Can the IRS audit these plans?; and 
  • What is the tax effect if Virgin Islands plans fail any qualification requirements?

The IRS resources page also offers links to Employee Plans Compliance Unit international projects (e.g., Hacienda Project), as well as additional material such as a webinar about how international issues impact employee retirement plans.