IRS Finds $10.6 Billion in Crimes as Agents Ramp Up Warrants

(Bloomberg) — The Internal Revenue Service uncovered $10.6 billion in financial crimes, up nearly 16% from the previous year, even as the Trump administration deployed agents well beyond their usual remit to handle law enforcement priorities.

The IRS’s criminal investigation unit highlighted the role its officials played in advancing President Donald Trump’s agenda in its annual report released Friday. These included cracking down on tax evasion tied to the employment of undocumented immigrants and using IRS agents to increase National Guard deployments in U.S. cities.

The agency found $4.5 billion in tax evasion in the federal fiscal year ending Sept. 30 (up nearly 112% from the previous year) and more than $6 billion was linked to other financial crimes. The number of arrest warrants issued also increased by a quarter, and about 14% more cases were referred to prosecutors compared to the previous fiscal year, the agency said.

The IRS said a number of factors contributed to the increase, including shifting priorities, the use of advanced analytics to detect suspicious activity and a new partnership with financial institutions to detect potential crimes.

While some enforcement priorities are consistent with those reported in past years, including a focus on money laundering, cyber-related crimes and tax credit fraud, the report also revealed new areas of focus in line with the Trump administration’s policy priorities.

In May, the IRS enforcement arm began providing support to U.S. Immigration and Customs Enforcement. As part of this shift in priorities, the agency has targeted “labor brokers” who often supply undocumented workers to the construction, agriculture and hospitality industries. The agency highlighted two lawsuits filed against brokers who were collectively ordered to pay $100 million in damages for payroll tax violations.

The report made no mention of the “tax gap,” or the difference between taxes owed and taxes paid, in a marked departure from annual reports released during the Biden administration. Ensuring businesses and wealthy individuals pay their full taxes was a priority during the Biden years.

More stories like this available Bloomberg.com