(Washington, DC, February 21, 2007) — Delegate to Congress Donna M. Christensen said that the Internal Revenue Service ruling issued today concerning the statute of limitations on how far back Virgin Islands residents can be audited “is not what we need.”  The Delegate said that IRS rules aimed at clarifying the tax collection agency’s recent memorandum on audits in the territory is “a very small step.”

Today’s ruling states that the unlimited right to audit Virgin Islands taxpayers would only apply to persons making more than $75,000 a year.  The IRS issued this clarification after the Delegate and others denounced an IRS General Counsel Advisory Memorandum, which took the unprecedented position that the IRS had the right to audit the returns of a V.I. taxpayer as far back as they like without regard to a long established three year statute of limitations on such audits. Christensen had testified before the House Ways and Means Subcommittee on Select Revenues last September calling the memorandum “heavy handed and damaging to the Territory’s EDC program.”

“Today’s notice does not fix the problem,” she noted. “As a result, we will continue to work with Ways and Means Chairman Charlie Rangel on a legislative solution.”