A Reuters analysis finds federal tax crime charges have fallen 27% in 2025, reaching decades-low levels amid deep staffing cuts and a refocusing of resources.
 |
| Exclusive: Tax Prosecutions Plummet as Trump Administration Shifts Enforcement Priorities |
Exclusive Analysis Shows Steep Decline in Federal Tax Crime Prosecutions
Federal prosecutions for tax crimes have plummeted to their lowest level in decades, declining more than 27% in 2025, according to a Reuters examination of Justice Department data. This steep drop coincides with a sweeping overhaul of U.S. law enforcement under the Trump administration, which has cut staffing at key agencies and redirected resources toward other priorities, including immigration enforcement.
The retreat from prosecuting tax fraud illustrates the tangible impact of this shift, raising concerns among former officials and experts that weakened enforcement could embolden tax cheats and cost the government billions in lost revenue.
“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 former top official in the Justice Department’s now-shuttered Tax Division.
The Scale of the Enforcement Decline
A Reuters analysis of federal court records reveals the sharp contraction in the government’s efforts to pursue tax crimes this year. The data shows a clear and dramatic downturn in both the staffing dedicated to these cases and the number of individuals charged.
| Enforcement Metric | 2024 (Jan. 1 - Nov. 1) | 2025 (Jan. 1 - Nov. 1) | Change |
|---|---|---|---|
| Federal Tax Prosecutions | 345 people charged | 251 people charged | ↓ 27% |
| DOJ Attorneys on Tax Cases | ~420 attorneys | ~160 attorneys | ↓ 62% |
| IRS Criminal Investigators | — | Lost 330+ employees | ↓ >10% |
The staffing decline is structural. The administration has dismantled the Justice Department’s dedicated Tax Division, a unit overseeing prosecutions since the 1930s, reassigning its lawyers. At least a third of the division's criminal prosecutors chose to quit rather than be moved. Simultaneously, the IRS’s criminal investigative unit has lost over 330 agents this year, with some remaining agents reportedly diverted to non-tax duties like local crime patrols in Washington, D.C.
A Stated Shift in Priority and Its Consequences
Internal sources indicate the decline is driven by policy. Early this year, top Trump administration officials informed prosecutors that tax investigations were not a priority, with one participant recalling the new management was "very skeptical about white-collar crime."
Justice Department spokeswoman Natalie Baldassarre stated that closing the centralized tax-crimes office "will not impact the ability of its civil litigators and criminal prosecutors from advancing its mission." The IRS confirmed the staffing reductions but declined further comment.
However, experts argue that criminal prosecutions, while recouping a small fraction of the estimated $700 billion annual "tax gap," are a crucial deterrent. The threat of prison or large fines is a key tool to ensure voluntary compliance.
The loss of institutional expertise compounds the problem. Valerie Makarewicz, a former prosecutor in Los Angeles—an office known for tax specialists—noted their team has dwindled from ten to just "three or four." "It’s a niche field and developing that expertise takes time," she said.
Political Scrutiny and a High-Profile Case
The enforcement slowdown occurs as the administration scrutinizes past investigations for alleged political "weaponization." While no evidence has been provided, this climate has intersected with prominent cases.
Cryptocurrency investor Roger Ver, facing charges for allegedly failing to pay tens of millions in taxes, hired defense attorneys with Trump ties to lobby the Justice Department. In October, prosecutors reached a deferred prosecution agreement allowing Ver to avoid conviction in exchange for a nearly $50 million payment.
The Bottom Line
The dramatic fall in tax prosecutions marks a significant policy shift with far-reaching implications. The administration frames its actions as a streamlining of government and a refocusing of law enforcement priorities. Critics, however, see a dangerous demotion of tax crime enforcement that undermines the fairness of the tax system, disadvantages honest taxpayers, and risks significant long-term revenue losses for the government. The full cost of this retreat may only become clear in the years ahead.
tax prosecutions decline, IRS criminal investigation, Justice Department Tax Division, white-collar crime, tax enforcement, Trump administration, federal prosecutors, tax gap,