IRS criminal referrals against wealthy taxpayers collapse in Trump’s first year back |
The number of criminal referrals made by the US Internal Revenue Service (IRS) against large corporations and ultrawealthy taxpayers has dropped dramatically during the first year of President Donald Trump’s return to the White House, according to newly released data obtained by the International Consortium of Investigative Journalists (ICIJ). The figures suggest a sharp slowdown in the federal government’s pursuit of potential tax evasion among the richest Americans and major corporations, raising concerns among tax experts and former officials about enforcement capacity and fairness in the US tax system.
The data indicates that the IRS referred at most two cases of suspected tax evasion involving ultrawealthy individuals or large businesses to criminal investigators during fiscal year 2025. This represents a steep decline compared with previous years and reflects a broader shift in enforcement priorities following extensive budget cuts and staffing reductions across the agency.
Criminal referrals are a critical step in the tax enforcement process. They occur when IRS civil auditors identify evidence suggesting that a taxpayer may have intentionally violated tax laws and refer the case to the agency’s Criminal Investigation division for potential prosecution. While not every referral results in charges or convictions, the number of referrals often serves as an important indicator of how aggressively the IRS is investigating complex tax avoidance schemes.
The sharp decline highlights what many observers view as a reversal of policies pursued during the administration of President Joe Biden, which had sought to increase scrutiny of wealthy taxpayers and multinational corporations. Under that earlier effort, the IRS received additional funding aimed at strengthening enforcement capabilities and hiring specialists skilled at unraveling complicated financial structures often used by high-net-worth individuals.
Danny Werfel, who served as IRS commissioner from 2023 to 2025, said the data illustrates how cuts to the agency’s resources can weaken its ability to hold powerful taxpayers accountable.
“When the IRS budget and staff is cut, your taxes don’t go down,” Werfel said after reviewing the........