The IRS Criminal Investigation (IRS-CI) division released its fiscal year 2025 annual report showing record-breaking results in uncovering financial crimes. The agency identified $10.59 billion in financial crimes from October 2024 through September 2025, representing a 15.7% increase from the previous year. Tax fraud alone accounted for $4.5 billion of these findings, marking a 111.8% increase from fiscal year 2024.
IRS-CI’s approximately 3,000 employees used new partnerships and advanced technology to track down criminal networks attempting to exploit government programs and launder money. The agency also saw significant increases in enforcement activity, with a 25% rise in search warrants and a 14% increase in prosecution referrals to the Department of Justice during the same period.
“Our work plays an integral role in shutting down criminal networks that try to exploit government programs and launder funds,” said IRS-CI Chief Guy Ficco. “We continue to evolve – integrating new technological tools, expanding our global partnerships, and streamlining operations – to make it harder for criminals to hide.”
The agency seized more than $800 million in assets and returned $100 million to crime victims during fiscal year 2025. Digital evidence collection also grew substantially, with agents seizing 2.35 petabytes of digital data—nearly 60% more than the previous fiscal year.
Focus on Tax Crimes and Cyber Threats
IRS-CI dedicated nearly 64% of its investigative time to tax crimes during fiscal year 2025, often using data analytics to uncover tax fraud and payroll schemes. This focus reflects the agency’s priority on protecting legitimate taxpayers and ensuring tax compliance across all income levels.
Eleven percent of the agency’s efforts targeted narcotics-related crimes, resulting in 447 convictions. Cyber-related investigations continued growing, with defendants in these cases receiving an average prison sentence of 63 months. The increasing sophistication of digital financial crimes has pushed IRS-CI to expand its technological capabilities and partnerships with other agencies.
Approximately 190 special agents were detailed to Homeland Security Task Forces, where they applied their financial investigation expertise to enforce federal law and protect national security. The agency also played key roles in Operation Safe and Beautiful in Washington, D.C., and the Restoring Law and Order Task Force in Memphis, Tennessee.
New Partnerships and Investigative Tools
This fiscal year marked the launch of CI-FIRST (Feedback in Response to Strategic Threats), a public-private partnership designed to modernize how IRS-CI collaborates with financial institutions. The initiative addresses Bank Secrecy Act challenges by providing feedback to help banks understand what information proves most valuable to investigators.
IRS-CI also introduced the Optimizing Financial Records Requests (OFRR) initiative, which streamlines how the agency requests information from financial institutions and how those institutions respond to legal and subpoena requests. These process improvements are designed to accelerate investigative timelines and improve case outcomes.
High-Profile Cases and Enforcement Actions
Several major cases concluded during fiscal year 2025, demonstrating the reach and impact of IRS-CI investigations. The Feeding Our Future fraud scheme—one of the largest pandemic-related fraud cases in U.S. history—saw multiple defendants sentenced for stealing more than $250 million in federal child-nutrition funds. The scheme’s leader, Abdiaziz Shafii Farah, received a 28-year prison sentence.
In cryptocurrency-related enforcement, Ilya Lichtenstein and Heather Morgan were sentenced for their roles in the 2016 Bitfinex hack and laundering nearly $71 million. Lichtenstein received five years in prison, while Morgan was sentenced to 18 months. The case highlighted IRS-CI’s growing expertise in tracking digital assets and blockchain transactions.
The agency’s investigation into TD Bank revealed significant anti-money laundering program failures that allowed more than $670 million in illicit funds to pass through bank accounts from 2019 to 2023. TD Bank pleaded guilty to Bank Secrecy Act and money laundering conspiracy violations and agreed to pay a record-breaking $1.8 billion in penalties.
Source: IRS-CI issues fiscal year 2025 annual report showcasing banner investigative results