Vento v. Dir. of VI Bureau of Internal Revenue, No. 11-2318 (3d Cir. 2013)Annotate this Case
Vento co-founded a technology company, OSI. When OSI was sold, the Ventos, their daughters, and Vento-controlled entities realized $180 million in capital gains for the 2001 tax year. The Ventos previously lived in and still maintain homes in the U.S., but first visited the Virgin Islands in 2001 and bought a residence there. Residents of the Virgin Islands pay income taxes to the Virgin Islands Bureau of Internal Revenue (VIBIR) rather than the Internal Revenue Service (IRS). All of the Ventos filed 2001 income tax returns with the VIBIR. The United States claims that they should have filed those returns with the IRS and assessed deficiencies and penalties that totaled over $9 million more than those assessed by the VIBIR. The district court found that the Ventos were not bona fide residents of the Virgin Islands as of December 31, 2001. The Third Circuit reversed in part, concluding that the parents were bona fide residents of the Virgin Islands, but that the daughters, who were not dependents, were not.