The Internal Revenue Service Criminal Investigation (IRS-CI) division, the armed enforcement wing of the IRS tasked with investigating financial crimes, has seen its workforce grow to the highest level in nearly a decade. A hiring surge and intensified focus on enforcement helped the division increase its staffing by nearly 11%, while its conviction rate climbed to an impressive 90%, according to the fiscal year 2024 annual report released on December 5.
The IRS-CI serves as the tax agency’s law enforcement branch, focusing on criminal violations of tax laws and related financial crimes. The latest report highlights the division’s achievements, including tackling cryptocurrency fraud, securing record-breaking settlements, and stepping up international operations.
The division now employs 2,290 special agents authorized to carry firearms and use lethal force, a 146-person increase in fiscal year 2024. Including support staff, the IRS-CI’s total workforce has grown to 3,474 employees, marking its largest workforce expansion in nearly a decade. This increase comes after years of declining staffing levels, which fell from 4,017 in 2010 to 2,858 by 2020.
The recent hiring boost is part of a broader resurgence within the IRS, fueled by funding from the 2022 Inflation Reduction Act. The legislation allocated $80 billion to the IRS, with $46 billion earmarked for enforcement. While a portion of these funds has since been clawed back, the remaining resources have enabled the IRS-CI to expand and modernize its operations.
IRS-CI Chief Guy Ficco noted the growing complexity of financial crimes. “Criminals are constantly evolving, using new venues, technologies, and techniques to facilitate financial crimes,” Ficco stated in the report. The expanded workforce is critical for keeping pace with these emerging threats, Ficco added.
The IRS-CI made significant progress on several fronts in 2024, showcasing its expanded capacity and enhanced expertise:
- Cryptocurrency Enforcement: The division achieved its first cryptocurrency tax fraud indictment and secured a record-setting financial settlement with Binance, the world’s largest cryptocurrency exchange, for anti-money laundering violations.
- Syndicated Conservation Easement Schemes: The IRS-CI secured its first sentencing in cases involving fraudulent tax shelter schemes that manipulate conservation easements to claim inflated tax deductions.
- Fraud and Asset Seizures: The division uncovered $9.1 billion in tax and financial fraud, obtained $1.7 billion in court-ordered restitution, and seized approximately $1.2 billion in criminal assets.
The division also launched 2,667 criminal investigations, which led to 1,571 convictions and raised its conviction rate from 88.4% in 2023 to 90% in 2024.
While the IRS-CI’s accomplishments have been widely acknowledged, the division’s expansion has sparked significant political debate. Critics, particularly Republican lawmakers, have voiced concerns that increased funding for enforcement could lead to heightened tax audits on lower- and middle-income Americans.
During debates surrounding the Inflation Reduction Act, opponents argued that bolstering enforcement resources might disproportionately target everyday taxpayers rather than wealthy individuals or corporations. IRS officials, however, have repeatedly denied such claims, stating that enforcement efforts are primarily aimed at combating large-scale financial crimes and tax evasion.
The IRS-CI report also emphasized its focus on sophisticated financial crimes rather than routine tax audits, highlighting its role in preserving the integrity of the U.S. tax system.
In addition to domestic operations, the IRS-CI expanded its international footprint in 2024 by establishing new attaché offices in Nassau, Bahamas, and a cyber attaché post in Singapore. These expansions are intended to strengthen global collaboration in combating financial crimes that transcend borders, such as money laundering and international tax evasion schemes.
“Global financial crimes demand global solutions,” Ficco stated, adding that the division’s expanded international presence will enable it to better coordinate with foreign partners to track and dismantle complex criminal networks.
Looking ahead to 2025, the IRS-CI aims to build on its momentum by leveraging its expanded resources to address evolving financial crimes. The division plans to enhance its use of emerging technologies, including data analytics and blockchain forensics, to identify and prosecute criminal activity more effectively.
“Protecting the integrity of the U.S. tax system requires constant vigilance and adaptation,” Ficco said. He noted that the division will prioritize cases involving large-scale tax evasion, cyber-related financial crimes, and fraud schemes that harm American taxpayers.
The IRS-CI’s recent achievements and growth mark a pivotal moment for the division as it adapts to the complexities of modern financial crime. While its expansion has drawn political scrutiny, the division’s supporters argue that its work is essential for maintaining public confidence in the tax system.
As the IRS-CI continues to expand its capabilities, its focus on tackling high-profile cases and adapting to new challenges will likely remain at the forefront of the national conversation about tax enforcement and financial crime.
