Benefits of IRS '936' program under scrutiny. (Internal Revenue Service; Section 936 of the Internal Revenue Code) (International Weekly)

Investors in Caribbean Basin Initiative (CBI) countries are rushing to take advantage of new regulations governing loan funds available under Section 936 of the U.S. Internal Revenue Code.

But tax experts say the Section 936 provisions still provide limited opportunities for investors. Some also question whether the CBI countries are really getting the kind of development and job creation intended by the Section 936 provisions.

Section 936 allows U.S. corporations with manufacturing facilities in Puerto Rico to deposit income in Puerto Rican banks or U.S. affiliates and avoid both U.S. and Puerto Rican income taxes.

Nearly $14 billion in Section 936 funds has accumulated. Since the late 1980s, these funds have been available at about 20 percent below the Eurodollar rate for investment projects in certain …