IRS Joins the J5, Should We Prepare to the International Enforcement? Expert Take

The IRS's Swiss Bank enforcement efforts may be winding down, but not its push for global tax compliance.

The J5 stands for an alliance of Joint Chiefs of Global Tax Enforcement from the United States, U.K., Canada, Australia, and the Netherlands who have come together to work on information sharing, with cryptocurrency high on the agenda.

So much for the U.S. bucking multilateralism! When it comes to tax enforcement, it appears that the U.S. remains eager to work with foreign governments to improve its detection and enforcement capabilities.

Lead the wider community in developing its strategic understanding of the methods, weaknesses and risks from offshore tax crime and cybercrime.

Raise international awareness that the J5 is working together to reduce transnational tax crime, cybercrime and money laundering, and create uncertainty for those who seek to commit such offenses.

The IRS is likely to apply this same model to cryptocurrency tax enforcement.

It's interesting that the J5 appears to be grouping tax evasion together with "Money laundering" and "Cybercrime," at least in the language it uses.

The J5's mission statement notes that it was formed "In response to the OECD's call for countries to do more to tackle the enablers of tax crime." The IRS, and the other members of the J5 appear to be taking this call seriously, and it's possible that cryptocurrency tax evasion will be dealt with even more aggressively than offshore accounts were in the IRS's Swiss Bank efforts.

With this backdrop, tax compliance is essential, and it will likely not pay to assume the IRS won't find out about an account or a wallet.

His practice focuses on tax controversy and audit defense and includes international tax and financial products/cryptocurrency tax planning work.