Will Two Unfavorable Watchdog Reports Trigger IRS Actions?

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Will Two Unfavorable Watchdog Reports Trigger IRS Actions?

May 25, 2026

United States
United States
United States
TAX NOTES FEDERAL

There is a rhythm to things: Congress enacts a new law, the IRS issues administrative guidance and takes other steps to implement it, certain groups raise perceived problems, tax watchdogs investigate and release reports identifying shortcomings and offering recommendations, the IRS agrees with portions of the reports and pledges to do better, and the world keeps turning.  This pattern has seen drastic changes recently, with watchdogs overtly criticizing the IRS when it comes to international tax enforcement, and the IRS outright dismissing many conclusions and suggestions.  This article by Partner Hale Sheppard examines recent events with respect to the Foreign Account Tax Compliance Act and Puerto Rico tax incentives, predicting that harsh watchdog reports will lead to increased enforcement actions soon.

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halesheppard@eversheds-sutherland

Hale E. Sheppard

Partner

Atlanta, United States

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