US Sen. Wyden denounces alleged misuse of tax incentives.

Sen. Ron Wyden (D-Ore.) speaks during a Senate Intelligence Committee hearing in Washington on Jan. 29, 2026. Wyden, the ranking member on the U.S. Senate Finance Committee, has escalated his sweeping investigation into the misuse of Puerto Rico’s Act 60 tax incentives, formally urging the IRS to scrutinize what he describes as a pattern of ultra‑wealthy investors using dubious legal opinions to evade massive federal tax liabilities. (Kenny Holston/The New York Times)

By THE STAR STAFF

U.S. Senate Finance Committee Ranking Member Ron Wyden has escalated his sweeping investigation into the misuse of Puerto Rico’s Act 60 tax incentives, formally urging the IRS to scrutinize what he describes as a pattern of ultra‑wealthy investors using dubious legal opinions to evade massive federal tax liabilities.

In a sharply worded letter to IRS Chief Tax Compliance Officer Jarod Koopman, Wyden warns that billionaire taxpayers may have sheltered “over $100 million dollars in federal taxes” by laundering pre‑existing capital gains through Puerto Rico.

Wyden’s investigators confirmed that for the 2022 tax year, a billionaire taxpayer received a legal opinion from attorneys Jeffrey Rubinger and Summer LePree regarding “the tax treatment of a large gain from the sale of partnership interests under Section 933.” The significance of that detail is unmistakable: both attorneys are now under federal criminal investigation for their work designing Puerto Rico tax‑avoidance structures for wealthy U.S. clients. As Wyden notes, the U.S. Attorney’s Office in Miami issued grand jury subpoenas seeking records tied to their “Puerto Rico tax planning structures.”

Whistleblowers told the committee that the billionaire and other wealthy individuals used the legal opinions to avoid paying federal taxes on capital gains that accrued while they still lived in U.S. states. Wyden calls the allegations “alarming,” especially because clients of Rubinger and LePree have already admitted to participating in schemes involving the abuse of Act 60.

At the center of Wyden’s inquiry is a massive transaction involving a firm founded by a billionaire whose name was blotted out. According to whistleblower accounts, shortly after relocating to Puerto Rico, the investor sold a large position that generated flow‑through gains in the hundreds of millions of dollars. Wyden writes that the investor “treated this entire flow‑through gain as exempt from U.S. tax, even though a large share of these gains accrued prior to [his] relocation to Puerto Rico.” The whistleblower alleges the maneuver allowed the investor to improperly avoid more than $100 million in federal taxes.

Wyden emphasizes that the law is not ambiguous. Treasury regulations explicitly state that gains from appreciated property sold within 10 years of becoming a Puerto Rico resident are generally treated as non‑Puerto Rico‑source income. Puerto Rico’s own Treasury Department confirmed to Wyden’s staff that “net capital gains attributable to the appreciation in the value of securities … accrued before the individual investor became a resident of Puerto Rico will be considered income from sources outside of Puerto Rico.”

The letter also ties Rubinger directly to a recent federal criminal case. Wyden’s investigators confirmed that Rubinger is “Attorney 1” in the indictment of Suresh Gajwani, who pleaded guilty to a tax‑evasion scheme involving Act 60. According to court filings quoted in the letter, Rubinger advised Gajwani that “built‑in capital gains for U.S. residents accrued prior to becoming a resident of Puerto Rico could be exempt from federal income taxes under Act 60,” a position the IRS later told him was “wrong.”

Wyden argues that this established pattern of inaccurate legal advice raises serious concerns about every transaction Rubinger and LePree touched, including those involving the billionaire at the center of the committee’s probe. He notes that both attorneys have been partners at major international law firms -- Baker McKenzie and now Winston & Strawn -- which cater to high‑net‑worth clients and are now entangled in the federal investigation.

The senator’s referral asks the IRS to examine the accuracy of all legal opinions Rubinger and LePree provided to wealthy Act 60 beneficiaries, determine whether they falsely advised that pre‑existing capital gains could be exempt from federal tax, and review whether those taxpayers paid any U.S. tax on gains accrued before moving to Puerto Rico. Wyden also calls for a full review of how much income those investors have treated as Puerto Rico‑source under Sections 933 and 937, and whether their federal returns properly distinguish between gains accrued before and after relocation.

Wyden frames the issue as a systemic threat to the integrity of the U.S. tax system. He warns that “dozens of ultra‑wealthy investors” may have relied on “dubious advice” to evade federal taxes.