§932 — Coordination of United States and Virgin Islands income taxes
39 cases·12 followed·4 distinguished·2 criticized·5 overruled·16 cited—31% support
Statute Text — 26 U.S.C. §932
This subsection shall apply to an individual for the taxable year if—
such individual—
is a citizen or resident of the United States (other than a bona fide resident of the Virgin Islands during the entire taxable year), and
has income derived from sources within the Virgin Islands, or effectively connected with the conduct of a trade or business within such possession, for the taxable year, or
such individual files a joint return for the taxable year with an individual described in subparagraph (A).
Each individual to whom this subsection applies for the taxable year shall file his income tax return for the taxable year with both the United States and the Virgin Islands.
In the case of an individual to whom this subsection applies in a taxable year for purposes of so much of this title (other than this section and section 7654) as relates to the taxes imposed by this chapter, the United States shall be treated as including the Virgin Islands.
Each individual to whom subsection (a) applies for the taxable year shall pay the applicable percentage of the taxes imposed by this chapter for such taxable year (determined without regard to paragraph (3)) to the Virgin Islands.
For purposes of paragraph (1), the term “applicable percentage” means the percentage which Virgin Islands adjusted gross income bears to adjusted gross income.
For purposes of subparagraph (A), the term “Virgin Islands adjusted gross income” means adjusted gross income determined by taking into account only income derived from sources within the Virgin Islands and deductions properly apportioned or allocable thereto.
There shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to the taxes required to be paid to the Virgin Islands under paragraph (1) which are so paid.
This subsection shall apply to an individual for the taxable year if—
such individual is a bona fide resident of the Virgin Islands during the entire taxable year, or
such individual files a joint return for the taxable year with an individual described in subparagraph (A).
Each individual to whom this subsection applies for the taxable year shall file an income tax return for the taxable year with the Virgin Islands.
In the case of an individual to whom this subsection applies in a taxable year for purposes of so much of this title (other than this section and section 7654) as relates to the taxes imposed by this chapter, the Virgin Islands shall be treated as including the United States.
In the case of an individual—
who is a bona fide resident of the Virgin Islands during the entire taxable year,
who, on his return of income tax to the Virgin Islands, reports income from all sources and identifies the source of each item shown on such return, and
who fully pays his tax liability referred to in section 934(a) to the Virgin Islands with respect to such income,
for purposes of calculating income tax liability to the United States, gross income shall not include any amount included in gross income on such return, and allocable deductions and credits shall not be taken into account.
In the case of a joint return, this section shall be applied on the basis of the residence of the spouse who has the greater adjusted gross income (determined without regard to community property laws) for the taxable year.
In applying this section for purposes of determining income tax liability incurred to the Virgin Islands, the provisions of this section shall not be affected by the provisions of Federal law referred to in section 934(a).
Treasury Regulations
- Treas. Reg. §Treas. Reg. §1.932-1 Coordination of United States and Virgin Islands income taxes
- Treas. Reg. §Treas. Reg. §1.932-1(a) Scope—(1) In general.
- Treas. Reg. §Treas. Reg. §1.932-1(b) U.
- Treas. Reg. §Treas. Reg. §1.932-1(c) Bona fide residents of the Virgin Islands.
- Treas. Reg. §Treas. Reg. §1.932-1(d) Joint returns.
- Treas. Reg. §Treas. Reg. §1.932-1(e) Place for filing returns—(1) U.
- Treas. Reg. §Treas. Reg. §1.932-1(f) Tax accounting standards—(1) In general.
- Treas. Reg. §Treas. Reg. §1.932-1(g) Extension of territory—(1) Section 932(a) taxpayers—(i) General rule.
- Treas. Reg. §Treas. Reg. §1.932-1(h) Entity status consistency requirement—(1) In general.
- Treas. Reg. §Treas. Reg. §1.932-1(i) Examples.
- Treas. Reg. §Treas. Reg. §1.932-1(j) Effective/applicability date.
39 Citing Cases
Turco certainly didn't mean to overrule Gen.
Turco certainly didn't mean to overrule Gen.
Turco certainly didn't mean to overrule Gen.
Turco certainly didn't mean to overrule Gen.
In the Fifth Circuit, unlike in the Eighth and Eleventh Circuits, there is no precedent squarely on point that we must follow. See Golsen v. Commissioner, 54 T.C. 742, 756–57 (1970), aff’d, 445 F.2d 985 (10th Cir. 1971). Our holding above gives effect to the statutory text and structure and is consistent with Cooper. We did not directly address whether the dual filing requirement under section 932(a)(2) was satisfied by a taxpayer’s sole filing with VIBIR in Estate of Sanders or Hulett.
Respondent's argument is inapposite.
Section 932 provides separate rules for U.S.
Section 932 provides separate rules for U.S.
Section 932 provides separate rules for U.S.
Section 932 Section 932 provides rules that govern the coordination ofthe U.S.
- 16 - [*16] In reviewing petitioners' position, we begin by turning to section 7654(e) which provides that the Secretary shall prescribe such regulations as may be necessary to carry out the provisions ofsection 932, including prescribing the information which individuals to whom section 932 applies are to furnish to the Secretary.
- 16 - [*16] In reviewing petitioners' position, we begin by turning to section 7654(e) which provides that the Secretary shall prescribe such regulations as may be necessary to carry out the provisions ofsection 932, including prescribing the information which individuals to whom section 932 applies are to furnish to the Secretary.
(i) filed territorial income tax returns with the Virgin Islands Bureau of Internal Revenue (BIR) for 2002, 2003, and 2004 pursuant to section 932(c) (2), and (ii) claimed he qualified for the gross income exclusion provided by section 932(c) (4) and therefore did not - 3 - have to file Federal income tax returns or pay Federal income taxes for such years.
As part of the TRA, Congress enacted a new section 932, which coordinates U.S.
at 2596, Congress repealed the inhabitant rule and enacted section 932, which coordinates the U.S.
rt of Tax Reform Act of 1986 (TRA), Pub. L. No. 99-514, sec. 1274(a), 100 Stat. at 2596. As part of the TRA Congress enacted a new section 932 which coordinates U.S. and USVI income taxes for individuals who are bona fide residents of the USVI under section 932. Appleton v. Commissioner, 140 T.C. at 279. A. Section 932 Section 932 provides rules that govern the coordination of the U.S. income tax system and the USVI income tax system. Specifically, section 932 provides the filing and payment req
for the collection of such tax may be begun without assessment, at any time.” I.R.C. § 6501(c)(3). In this case, the parties disagree about whether the general three-year period or the exception for nonfilers applies. 5 [*5] B. USVI Income Taxation—Section 932 1. Background The USVI is a U.S. territory, but it has a separate tax system that “mirrors” the U.S. system. 48 U.S.C. § 1541(a); Appleton, 140 T.C. at 278. The USVI uses a “mirror code” that is identical to the Internal Revenue Code, exce
In order to ensúre the "fair implementation" ofsection 932, the United States and the Virgin Islands entered into an agreement "for the exchange of information and mut al assistance with respect to taxes in order to prevent the evasion or avoidance ofUnited States or Virgin Islands taxes".
In order to ensure the “fair implementation” of section 932, the United States and the Virgin Islands entered into an agreement “for the exchange of information and mutual assistance with respect to taxes in order to prevent the evasion or avoidance of United States or Virgin Islands taxes”.
as a consequence of his satisfying all the requirements of section 932 (c) (4) .
§1612.” Petitioner maintains that even though an individual may have both Federal and Virgin Islands tax obligations under section 932, this does not affect the District Court’s jurisdiction.
932.703(1) (West 1985). A final order of forfeiture was never entered in this case because petitioner, through his attorney, negotiated an agreement with the police enabling him to repurchase his property for a price of $90,900. After he repurchased the property, petitioner and the Police Department settled and dismissed the matter. On Novembe