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International Tax Enforcers Flex Their Muscles in Puerto Rico

Bloomberg Tax

In this article, Joseph Rillotta* and Andy Howlett write that the Internal Revenue Service (IRS) has shown it can "do more with less" by improving coordination with foreign tax enforcement agencies. The culmination of this effort — the Joint Chiefs of Global Tax Enforcement consortium, or J5 — appears to have contributed to the collapse of Puerto Rico-based Euro Pacific Bank. Congress should take note of this instance of the IRS doing more with less: leveraging foreign tax enforcement, international cooperation, and coordinated financial intelligence gathering—not only to make current cases and to support the shutdown of an allegedly abusive offshore bank, but also to plant the seeds for future enforcement activities. The authors expect a multitude of criminal prosecutions and audits involving alleged Puerto Rico Act 22 abusers.

*Former Miller & Chevalier attorney