May 2021 Foodman website and JD Supra
cumplimiento compliance

In 2017, following the Panama Papers and Paradise Papers data leaks, the Organization for Economic Co-operation and Development (OECD) issued a “call to action” for countries to do more to tackle enablers of tax crimes. The result of this “call to action” was the 2018 establishment of an operational alliance known as the “Joint Chiefs of Global Tax Enforcement” (J5).  Five leaders of the tax enforcement authorities of Australia, Canada, the Netherlands, the United Kingdom, and the United States (IRS-Criminal Investigation:IRS CI) comprise its leadership.  Through increased collaboration in the international fight against and transnational tax crime and money laundering and by implementing new approaches via joint efforts and sharing the results with a greater tax enforcement community, the J5 works together to gather information, share intelligence and conduct coordinated operations, making significant progress in each country’s fight against transnational tax crime in the economic, fiscal, and social interests of countries.

According to the IRS, after two years of collaboration, data sharing and accelerated casework, the J5 began seeing operational results in early 2020. Tracking down those who make a living out of facilitating and enabling international tax crime as well as cryptocurrency have been the Challenges of the J5.

Next for the J5 is the Fintech Industry

FINtech companies have one attribute in common: they trade in intangible online assets and services. Because of that intangible nature, they can trade from anywhere in the world, limited only by internet availability. Government regulation of cryptocurrency and financial services have led to the need for FINtech companies having a physical presence in particular countries or areas. Due to the online nature of its products, the novelty and the lack of regulation and compliance in some areas, the FINtech industry is perceived by law enforcement as a tool susceptible for tax avoiders and money launderers to commit crimes.

The J5: 

  • works together to investigate transnational tax crimes enablers and money launderers and those who benefit from it.
  • collaborates internationally to decrease the growing threat to tax administrations posed by cryptocurrencies and cybercrime.
  • makes the most of data and technology.

The J5 accomplishes this by:

  • Developing shared strategies to gather information and intelligence that will strengthen operational cooperation in matters of mutual interest, and target those who seek to commit transnational tax crime, cybercrime and launder the proceeds of crime.
  • Driving strategies and procedures to conduct joint investigations and disrupt the activity of those who commit transnational tax crime, cybercrime, as well as those who enable and assist money laundering.
  • Collaborating on effective communications reinforcing that J5 is working together to tackle transnational tax crime, cybercrime, and money laundering.

Expected Results of the J5 Collaboration

  • Enhancing existing investigation and intelligence programs
  • Identifying significant targets for new investigations
  • Improving the tactical intelligence threat picture now and into the future
  • Leading the wider community with developing a strategic understanding of the methods, weaknesses and risks associated with offshore tax crime and cybercrime
  • Raising international awareness that the J5 is working together to reduce transnational tax crime, cybercrime, and money laundering, and creating uncertainty for those seeking to commit such offenses.

The J5 Coordinated Push is bringing results

The Group utilizes investigators, cryptocurrency experts, analytical tools, country treaties and data scientists in a coordinated push to track down individuals and organizations perpetrating tax crimes around the world.  Experts from each country are optimizing data from a variety of open and investigative sources available to each country, including offshore account information.

According to the OECD, The J5 has a work stream specifically dedicated to combatting professional enablers. Each country has shared intelligence on targets they have operating in their own country where there is a multijurisdictional interest. These investigations involve sophisticated international enablers of tax evasion, i.e., global financial institutions and their intermediaries who help taxpayers to hide their income and assets.

Out-of- compliance U.S. Taxpayers involved with evading U.S income and other taxes, cryptocurrency or FINtech ought to realize that they will eventually be identified by the IRS.

Best to come forward first before the IRS or any foreign Tax agency pinpoints you.

Consult your specialized Tax Advisor.  ©