Hastings International and Comparative Law Review


By constructing a hypothetical situation in which a non- United States bank with branches in New York and the Bahamas might illegally shift foreign exchange profits from New York to the tax-haven Bahamas, this Note explores what action the United States Internal Revenue Service (IRS) could take in pursuing and recapturing lost tax revenue. It is proposed that the application of section 482 be used to reallocate from abroad United States source income of banks. Recent developments in this area should give the IRS reason to consider enlarging the uses of section 482.