IRS Investigating Crypto Traders Using Puerto Rico Tax Breaks: Report

"The noose is tightening" for wealthy Americans suspected of exploiting Puerto Rico's relaxed tax regime.

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US prosecutors and Internal Revenue Service (IRS) agents are reportedly investigating wealthy crypto traders and fund managers suspected of illegally benefiting from Puerto Rico's tax breaks.

According to a June 12 report from Bloomberg, investigators are preparing civil and criminal lawsuits against a number of hedge fund managers, crypto traders and other wealthy Americans who may have lied about the nature of their residence and key elements of their income. in order to take unfair advantage of the tax advantages.

US officials are also looking into the lawyers and accountants responsible for marketing the island territory's tax program, with at least two criminal investigations expected to result in charges in the near future. Prosecutors are reportedly considering conspiracy and wire fraud charges.

Many claimed that Act 22 would stimulate investment in Puerto Rico and bring incalculable benefits.

Unfortunately, this only worsened inequalities and turned public relations into a tax haven.

We need serious analysis from the federal government on the impact of Law 22 and its ability to help Puerto Ricans. https://t.co/eBxrW2zmP7

– Rep. Nydia Velazquez (@NydiaVelazquez) May 31, 2023

Recalling a conversation with a U.S. federal prosecutor, attorney Carlos Ortiz said prosecutors were working with "IRS agents" as well as Puerto Rican officials.

"The message is that the noose is tightening."

Since Puerto Rico introduced its new tax policy in 2012, more than 5,000 American individuals have moved to the country. One of the benefits of such a decision is to save on federal income tax.

Puerto Rico's tax policy grants individuals a 100% exemption...