IRS Criminal Investigation’s fiscal year 2025 report highlights how new partnerships and innovative financial investigative techniques led to the tax agency’s law enforcement arm’s successes against domestic and global tax criminals.
While much of the Internal Revenue Service came under Department of Government Efficiency (DOGE) scrutiny this year, resulting in 6,700 layoffs during the main tax-filing season, the tax agency’s law enforcement arm reports that shifting priorities did not hamper its main mission.
In fact, the Internal Revenue Service Criminal Investigation (IRS-CI) in fiscal year 2025 (FY25) “saw a significant increase in the amount of tax fraud identified — more than double the amount uncovered” the prior fiscal year, according to IRS-CI’s annual report released today.
The report, officially IRS Publication 3583, notes that it saw a 25 percent increase in the number of warrants executed throughout the year, as well as an almost 14 percent rise in cases referred for prosecution.
“In fiscal year 2025, IRS-CI held some of the most egregious tax criminals accountable, dismantled schemes that targeted the vulnerable and defrauded government programs, applied its financial expertise to disrupt drug traffickers, and safeguarded our nation’s national security by investigating sanctions evasion and illegal hiring schemes,” wrote IRS-CI Chief Guy Ficco in his introduction to the report.
Tallying IRS-CI investigative results: Like the rest of the tax agency, IRS-CI also keeps track of its numbers.
While much of the main IRS’ personnel was drastically slashed, IRS-CI staffing was relative stable. FY25 ended with 3,143 total IRS-CI employees. Special agents accounted for 2,189 and 954 were professional staff. That was down from fiscal 2024’s 3,474 count, but on par with the 3,139 total staff in fiscal 2023.
It’s no surprise that the primary focus of IRS-CI personnel in fiscal 2025, which ran from Oct. 1, 2024, through Sept. 30, 2025, was on tax crimes. Those cases accounted for 63.3 percent of the criminal agents’ direct investigative time.
The numbers’ breakout was 1,380 IRS-CI tax crime investigations. Of those, 834 prosecutions were recommended, resulting in 589 defendants being sentenced.
In those tax crime cases, the special agents often used data analytics to uncover tax fraud and payroll schemes.
Another 11 percent of IRS-CI efforts focused on narcotics-related crimes, resulting in 447 convictions during the fiscal year. IRS-CI also initiated 1,153 money laundering investigations in fiscal 2025. Those cases resulted in 2,313 seizures and 994 forfeitures.
Cyber criminals who victimize others through investment and fraud schemes also continued to be a growing target in FY25. IRS-CI seized 2.35 petabytes of digital data, a nearly 60 percent increase from the previous fiscal year.
Defendants in these cyber-related cases were sentenced to an average of 63 months in prison for their crimes.
Criminal dollars stopped, recovered: As far as money, IRS-CI investigators last fiscal year identified financial crimes totaling $10.59 billion, representing a 15.7 percent increase from fiscal 2024.
Of that total, $4.5 billion resulted from tax fraud, marking an increase of 111.8 percent from the prior fiscal year. The other almost $6.1 billion was from other financial crimes that caught the investigative attention of IRS-CI.
In the investigations’ next phase, IRS-CI executed 1,445 warrants, with 2,043 cases, a 14 percent increase, referred to the Department of Justice for prosecution. Of those cases, 1,611 resulted in convictions, an 89 percent success rate.
And on the recovery front, IRS-CI special agents seized more than $800 million in assets and returned $100 million to crime victims in FY25.
New initiatives launched: The usual tax et al crimes were joined in FY25 by some new IRS-CI efforts.
IRS-CI this year announced CI-FIRST, or Feedback in Response to Strategic Threats. This flagship public-private partnership was created to modernize how IRS-CI works with financial institutions.
CI-FIRST addresses Bank Secrecy Act challenges by providing feedback to help banks understand what is most helpful to investigators.
In addition, the report cites IRS-CI’s Optimizing Financial Records Requests initiative, commonly known as OFRR, for accelerated investigative timelines. OFRR streamlined and standardized how IRS-CI requests and how financial institutions respond to legal and subpoena requests.
IRS-CI also strengthened and expanded its federal law enforcement partnerships in FY25 to deal with emerging national threats.
The newly established Homeland Security Task Forces allowed IRS-CI to deploy special agents nationwide to assist in combating violent crime, transnational organizations, and financial exploitation, according to the report.
“These collaborations showcase the adaptability and expertise of the IRS-CI’s workforce in applying financial intelligence to complex, multi-agency operations,” noted the report.
Ficco also specifically pointed to “collaboration [that] has been a cornerstone of our success.” He specifically cited IRS-CI’s work with the Joint Chiefs of Global Tax Enforcement (J5).
That partnership effort, Ficco said, resulted in cross-border investigations and intelligence-sharing that led to “the guilty plea of a government contractor for evading millions of dollars in U.S. taxes and the conviction of the head of a cryptocurrency investment scheme for defrauding investors of millions.”
Tax Felon Friday: Today’s post is the latest addition to the ol’ blog’s Tax Felon Friday feature.
You can read about some of the significant IRS-CI cases in FY25 in its annual report.
And if you want to catch up on other tax miscreants, from those just charged and/or indicted to those convicted and/or confessed and sentenced, check out the ol’ blogs’ special Tax Felon Friday page.
You also can find more tax crime posts, notably those that were published long before I gave them a special end-of-week feature, you can peruse, what else, the tax crimes category. You’ll find this post at the top of that collection right now, so just scroll down for more.
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