DOJ: DOJ’s Fraud Division, IRS, and IRS-CI Expose More than $490M in Tax Fraud in National Tax Enforcement Surge

• The surge included 23 actions with new charges against 31 defendants, with alleged losses exceeding approximately $350,000,000.
• Fraud Division, IRS, and IRS-CI coordinated with 35 U.S. Attorneys' Offices, returning trials, guilty pleas, and sentencings affecting another 45 defendants.

The DOJ, IRS, and IRS-CI conducted a nationwide enforcement surge from early September to mid-October, targeting tax fraud schemes. The operation resulted in prosecutorial actions against 76 defendants, with alleged and proven crimes causing an estimated loss of more than $490,000,000 to the federal government.

The surge included 23 actions with new charges against 31 defendants, with losses exceeding approximately $350,000,000, and around 39 other enforcement actions—trials, guilty pleas, and sentencings—affecting 45 defendants and nearly $140,000,000 in losses. Notable cases involved fraudulent tax credits, illegal tax shelters, and false returns.

• $490,000,000 Estimated loss of revenue to federal government
• 76 Defendants targeted in enforcement surge
• $350,000,000 Loss from new charges against 31 defendants

• Review client activity for COVID-19 sick leave credits, fuel tax credits, and Employee Retention Credits as flagged in DOJ's notable cases.
• Screen for use of fraudulent trust schemes and assignment of income to sham trusts, as seen in United States vs. MacDonald, Duren, Cayce, and Weickgenant.
• Audit for suspicious ITIN-related refund claims and check-cashing patterns similar to the $74 million scheme in United States v. Gustavo Rojano Salazar et al.

This surge demonstrates a coordinated, nationwide crackdown on tax fraud, with significant losses identified and prosecuted. Compliance officers must be alert to evolving fraud typologies, including misuse of COVID-19 credits, fraudulent trust schemes, and ITIN-based refund scams. The DOJ’s actions highlight the importance of robust controls, timely detection, and reporting of suspicious tax-related activities. Enhanced scrutiny of tax return preparers, employee-leasing businesses, and refund claims is essential to prevent similar losses and ensure compliance with federal tax laws.