Federal tax proceedings fell to their lowest level in decades this year, down more than 27% from the previous year, as the Trump administration reduced the number of lawyers and agents handling these cases, according to a Reuters analysis.
President Donald Trump’s administration carried out a radical reform of law enforcement in the United States this year, firing numerous lawyers and focusing large sectors of the Justice Department on the search for immigrants. Their withdrawal from tax law enforcement illustrates the impact this change has had on other crime-fighting initiatives.
The administration made deep cuts to the Internal Revenue Service’s criminal investigation unit, and some of those who remained were ordered to start working on immigration cases or anti-crime patrols in Washington, according to government records and officials who spoke on condition of anonymity because they were not allowed to speak publicly about their work.
At the same time, the Justice Department closed its Tax Division, and officials said a third or more of the criminal lawyers who worked there resigned.
The government estimates that it collects almost $700 billion less in taxes than it is owed each year. Criminal proceedings seek to recover only a small fraction of that amount, but the threat of prison or large fines is considered one of the government’s key tools to deter fraud. Experts, including former IRS and Justice Department officials, fear that weakening this tool could encourage more fraud.
“Reducing the application of the criminal law to all types of taxpayers would indicate indifference to fraud and would be an insult to the millions of honest taxpayers who pay the taxes they owe,” said David Hubbert, senior fellow at the Tax Law Center at New York University School of Law and a former top Tax Division official.
You may be interested: Trump tries to block undocumented immigrants’ access to refundable tax credits
Tax processes are not a priority for the Trump Administration
Reuters used federal court records to tally the number of Justice Department lawyers who appeared on behalf of the government in tax proceedings between January and early November. Last year, about 420 did. This year, about 160 did.
Senior Trump administration officials informed prosecutors earlier this year that tax investigations were not a priority, according to three people familiar with the conversations, who spoke on condition of anonymity to discuss the department’s internal deliberations.
Participants concluded that the department’s new leadership was “very skeptical about white-collar crime and whether we should take on those cases,” recalled a person familiar with the conversations.
Justice Department spokeswoman Natalie Baldassarre said the closure of the centralized tax crimes office “will not impact the ability of its civil litigants and criminal prosecutors to advance their mission to fairly and consistently apply the nation’s tax laws.” The IRS confirmed that its criminal enforcement staff had been reduced by 330 employees this year, but declined to comment.
The slowdown in tax proceedings comes as the administration examines past investigations for signs of prior political influence, or what some officials alleged was “weaponizing” during Joe Biden’s presidency.
They did not provide evidence to support this accusation. In one such case, cryptocurrency investor Roger Ver, also known as “Bitcoin Jesus,” posted a video in which he claimed to be being pursued by a gun-toting Justice Department on pending criminal charges, alleging that he had failed to pay tens of millions of dollars in taxes.
Ver hired defense attorneys with ties to Donald Trump, including Chris Kise, to pressure the Justice Department to drop the case. In October, Kise and a senior Justice Department official who previously represented Ivanka Trump reached a deferred prosecution agreement that allowed Ver to avoid a conviction in exchange for paying nearly $50 million to the government.
With information from Reuters
Follow us on Google News to always stay informed
