If you have clients who are lucky enough to have millions in the bank and a home in the Virgin Islands, you might want to brush up on a recent tax ruling from the Third Circuit Court of Appeals about residency requirements.
Residents of the Virgin Islands pay income taxes to the Virgin Islands Bureau of Internal Revenue (VIBIR) rather than the Internal Revenue Service (IRS). Appellants Richard and Lana Vento (the Ventos) filed a joint 2001 income tax return with the VIBIR. Their three daughters also filed their 2001 income tax returns with the VIBIR. The United States claims that the Ventos and their daughters should have filed those returns with the IRS instead.
The proper tax jurisdiction depends on whether they were bona fide residents of the Virgin Islands as of December 31, 2001. Here, there were multiple answers to that question.