$10.6B in financial crime flagged as IRS sharpens enforcement

IRS-CI Annual Report FY2025. Publication 3583, Rev. 12-2025.

IRS Criminal Investigation is out with its 2025 Annual Report, which summarizes the agency’s enforcement activity for fiscal year 2025 and uses selected cases to illustrate where it is directing its resources.

The report highlights tax fraud, cyber-enabled financial crime, bank compliance failures, pandemic relief fraud, offshore evasion, and sanctions violations.

It pairs headline dollar amounts and conviction statistics with narrative case studies to reinforce a single theme: IRS views tax enforcement as inseparable from broader financial crime and national security investigations.

FY25 snapshot

• Tax fraud identified: $4.49B.

• Other identified financial crimes: $6.10B.

• Warrants executed: 1,445.

• Referred for prosecution: 2,043.

• Convictions: 1,611. Conviction rate: 89%.

• Digital data handled: 2.35 petabytes.

Where IRS-CI spent its time

Direct investigative time spent:

• 63.3% tax matters.

• 23.7% non-tax matters.

• 11.2% narcotics.

• 1.8% uncategorized.

Investigation sources (top categories):

• U.S. Attorney’s Office: 29%.

• Other federal agencies: 27%.

• IRS-CI generated: 19%.

• FinCEN data: 12%.

• Public: 6%.

• State and local government: 4%.

• IRS civil: 3%.

Operational themes IRS-CI emphasized

• Cybercrime focus, with examples of darknet drug sales, crypto mixing, and exchange hacks.

• CI-FIRST initiative to improve bank reporting feedback loops and speed financial records requests.

• Expanded interagency work, including Homeland Security Task Forces and other deployments, was framed as broader public safety support.

Notable case highlights

• TD Bank AML failures: a report claims 92% of transaction volume went unmonitored for a period, citing a 2024 resolution that included a forfeiture and a criminal fine.

• Bitfinex hack: describes theft of 119,754 bitcoin, laundering methods, guilty pleas, and sentences.

• Export controls and sanctions evasion: procurement network tied to Russia, shell companies, and unreported funds routed through U.S. accounts.

• Feeding Our Future fraud: describes a $300M-plus Child Nutrition Program fraud, kickbacks, and a 28-year sentence with restitution.

• Credit Suisse offshore evasion: describes assistance to U.S. taxpayers hiding $4B-plus in offshore accounts and a penalty package of around $510.6M.

• Syndicated conservation easements: describes criminal cases against promoters and related professionals, including commissions and asserted tax loss figures.

Selected metrics from the appendix

FY combined results (FY25 vs FY24):

• Investigations initiated: 2,792 vs 2,667.

• Prosecution recommendations: 2,043 vs 1,794.

• Informations and indictments: 1,726 vs 1,669.

• Sentenced: 1,613 vs 1,582.

• Incarceration rate: 76% vs 76%.

• Average months to serve: 49 vs 44.

The Takeaway

The report sends a clear signal about enforcement priorities.

IRS is framing tax enforcement as part of a broader financial crime ecosystem rather than a standalone function. Crypto, bank compliance failures, sanctions evasion, and traditional tax fraud are now presented as overlapping risks rather than separate lanes.

The agency continues to emphasize high conviction rates and large dollar amounts, even as investigative resources are stretched across non-tax missions.

Banks, promoters, and intermediaries appear squarely in the spotlight. Individual taxpayers remain exposed, but the real message is institutional. If you sit between money and reporting, expect attention.