here - Fuerst Ittleman David & Joseph, PL

Case: 11-1612 Document: 003110561288 Page: 16 Date Filed: 06/13/2011
poverty line and the per capital income in the Territory that ranks behind all 50
States and the District of Columbia. 8
In 1986, Congress enacted Section 932 of the Internal Revenue Code, which
draws a clear distinction between individuals who are bona fide USVI residents
and those who are not. A United States resident who derives income from the
USVI, but who is not a bona fide USVI resident, must file two tax returns, one
with the IRS and the other with the USVI. IRC § 932(a). Such individuals pay tax
on USVI source income to the BIR, and tax on non-USVI source income to the
IRS. IRC § 932(b). In contrast, a bona fide resident of the USVI must file a return
only with the BIR, and pays tax on all income, regardless of its source, to the
USVI. IRC § 932(c). By paying the BIR the correct amount of tax on all
worldwide income, a bona fide USVI resident is relieved of any income tax
liability to the United States, even on non-USVI source income. Id.; see also
Abramson Enters., Inc. v. Gov’t of the V.I., 994 F.2d 140 (3d Cir. 1993).
In enacting IRC § 932, Congress contemplated that the USVI BIR would
provide the IRS with information regarding Virgin Islands residents that report
non-Virgin Islands income:
[a] Virgin Islands resident deriving gross income from sources
outside the Virgin Islands will report all items of such income on
8 Available at http://www.statemaster.com/graph/eco_gdp_percap-product-currentdollars-per-capita,
last Accessed June 12, 2011.
FUERST ITTLEMAN, PL
1001 BRICKELL BAY DRIVE, 32 ND FLOOR, MIAMI, FL 33131 • T: 305.350.5690 • F: 305.371.8989 • WWW.FUERSTLAW.COM
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