IRS probes crypto traders using Puerto Rico tax breaks: Report

cointelegraph.com:

Prosecutors from the United States and agents from the Internal Revenue Service (IRS) 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 currently building civil and criminal cases against a number of hedge fund managers, crypto traders and other wealthy Americans who may have lied about the nature of their residency and key elements of their income in order to take unfair advantage of the tax breaks.

Officials from the U.S. are also delving into attorneys 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 looking at conspiracy and wire fraud charges.

Many claimed Act 22 would drive investment to Puerto Rico and bring untold benefits.Unfortunately, it's only worsened inequality & turned PR into a tax haven.We need a serious analysis from the Federal gov’t on the impact of Act 22 & its ability to help Puerto Ricans. https://t.co/eBxrW2zmP7

Recalling a conversation with a U.S. federal prosecutor, attorney Carlos Ortiz said the prosecutors were working with “IRS agents” as well as officials from Puerto Rico.

Since Puerto Rico introduced its new tax policy in 2012, more than 5,000 American individuals relocated to the country, one of the benefits of doing so includes saving onfederal income tax.

Puerto Rico’s tax policy grants individuals a 100% exemption on dividends, 60% exemption on municipal taxes and zero federal taxes on source income earned within the region.

Additionally, more than 3,600 businesses have been able to avoid paying