Tax Prosecutions Plunge as Administration Shifts Priorities: Enforcement Capacity Erodes

WASHINGTON — Federal criminal prosecutions for tax offenses fell to their lowest levels in decades this year, dropping more than 27% year‑over‑year, as the current administration reordered Justice Department priorities and cut staff devoted to tax enforcement, a Reuters review found.

Enforcement Shrinks Amid Organizational Changes

Senior officials implemented deep cuts to the Internal Revenue Service’s Criminal Investigation unit and disbanded the Justice Department’s long‑standing centralized Tax Division. According to government records and current and former officials, some IRS agents and prosecutors were reassigned to immigration work or to participate in street patrols in Washington. At the same time, at least one‑third of approximately 80 criminal prosecutors in the Tax Division resigned rather than accept reassignment.

Key Data From Reuters Analysis

Reuters counted federal court dockets and found that, from Jan. 1 through Nov. 1, prosecutors charged 251 people with tax‑law violations — a decline of about 27% from the same period a year earlier. Reuters also found that roughly 160 Justice Department attorneys appeared for the government in tax prosecutions this year, down from about 420 during the same Jan–Nov timeframe last year.

"Decreasing criminal enforcement across all types of taxpayers would signal an indifference to cheating and insults the millions of honest filers who pay the taxes they owe," said David Hubbert, a senior fellow at NYU's Tax Law Center and a former senior official in the Justice Department’s Tax Division.

Staffing Cuts and Reassignments

The IRS confirmed criminal enforcement staffing declined by 330 employees this year; an ombudsman report said the agency’s criminal arm lost more than 10% of its workforce between January and June, and overall IRS staffing fell by more than a quarter. Department records also show over 1,000 lawyers departed U.S. attorneys’ offices this year, roughly double recent annual departures, reducing white‑collar prosecution capacity nationwide.

Officials said some remaining IRS agents were assigned to non‑tax duties. In Washington, the IRS office initially sent a small number of its roughly 60 agents to assist local police patrols; after a complaint from a senior White House aide, that figure rose to more than 20 agents deployed on the streets.

Notable Cases And Political Context

The slowdown has unfolded alongside reviews of prior investigations for alleged political bias. One high‑profile matter involved cryptocurrency investor Roger Ver (aka "BitcoinJesus"), who faced charges of failing to pay tens of millions in taxes. Ver retained lawyers with ties to President Trump. In October, his case was resolved with a deferred prosecution agreement requiring him to pay nearly $50 million rather than face conviction.

How Reuters Measured The Decline

Reuters compiled dockets from Westlaw covering publicly available federal criminal cases back to the 1990s and compared the number of people charged in tax cases between Jan. 1 and Nov. 1 each year. In some instances Reuters used artificial intelligence to classify charges; random checks indicated the method was about 98% accurate.

The combination of dismantled structures, departures of experienced prosecutors, reduced IRS investigative capacity and reassignment of agents has, officials say, slowed the pace of tax prosecutions this year and raised concerns among former prosecutors and tax experts that reduced enforcement may weaken deterrence.

Reporting by Brad Heath and Sarah N. Lynch; editing by Nick Zieminski.