$4.7 Billion Recovered for U.S. Taxpayers, Help From Whistleblowers
The IRS provided the regular quarterly update to the Strategic Operating Plan, outlining key milestones in criminal investigations, improvements to taxpayer services and advancements in digital modernization that have transformed agency operations while protecting billions of taxpayer dollars.
The IRS has now recovered $4.7 billion from new initiatives underway. This includes more than $1.3 billion from high-income, high-wealth individuals who have not paid overdue tax debt or filed tax returns, $2.9 billion related to IRS Criminal Investigation work into tax and financial crimes, including drug trafficking, cybercrime and terrorist financing, and $475 million in proceeds from criminal and civil cases attributable to whistleblowers.
The IRS also announced also new results from the focus on high-income non-filers who have not filed taxes since 2017. They have now collected an initial $292 million from more than 28,000 non-filers, an increase of $120 million since September 2024. These are cases where IRS has received third-party information—such as through Forms W-2 and 1099s—indicating these people received income between $400,000 and $1 million or more than $1 million, but failed to file a tax return. The non-filer program has run sporadically since 2016 due to severe budget and staff limitations that did not allow these cases to be pursued. With additional funding, the IRS had the capacity to resume this core tax administration work earlier this year.
“The IRS continues to show dramatic progress on a wide array of the agency’s transformation efforts, producing real-world improvements to help taxpayers and businesses while also taking important steps in the law-enforcement and compliance arena to protect billions from ongoing schemes, ensure high-income individuals file returns and pay their taxes and penalties, and battle everything from terrorist financing to drug traffickers,” said IRS Commissioner Danny Werfel.
Pursuing Drug Traffickers, Cybercrime and Terrorist Financing
IRS Criminal Investigation (IRS-CI) is charged with investigating tax and financial crimes, including drug trafficking, cybercrime and terrorist financing. In Fiscal Year 2024 (FY24), IRS-CI identified more than $9.1 billion in fraud, obtained court orders totaling $1.7 billion in restitution to U.S. taxpayers and seized criminal assets totaling approximately $1.2 billion.
Examples of IRS-CI Cases
As part of the Organized Crime Drug Enforcement Task Force (OCDETF), CI has helped investigate numerous cases in partnership with other law enforcement agencies. CI’s financial expertise in following the money not only helped unravel financial and tax crimes but other crimes including organized drug trafficking. According to public court records, these include:
- In October, Jason Brown was sentenced to 18 years in federal prison for trafficking fentanyl and attempting to provide material support to the Islamic State of Iraq and al-Sham, also known as ISIS. On three occasions in 2019, Brown provided $500 in cash to an individual with the understanding that the money would be wired to an ISIS soldier engaged in terrorist activity in Syria. Unbeknownst to Brown, the individual to whom he provided the money was confidentially working with law enforcement, and the purported ISIS fighter was actually an undercover law enforcement officer. Also in 2019, Brown trafficked fentanyl and other drugs from California to the Chicago suburbs and illegally possessed several loaded handguns in furtherance of his drug trafficking activities.
- IRS-CI provided significant assistance in an investigation that led to drug dealer George Pherai-Bogeajis being sentenced in November to 19 years and 7 months in federal prison for conspiring to distribute methamphetamine and fentanyl and possessing firearms in furtherance of drug trafficking. Pherai-Bogeajis also forfeited four vehicles and four firearms used in the offense, along with $867,265 of drug proceeds. In April, law enforcement executed a search warrant at his Florida home, seizing nearly 50 kilograms of methamphetamine, thousands of grams of MDMA, more than two kilograms of cocaine and nearly a kilogram of other narcotics, including fentanyl.
- Christian Grajeda-Varela was sentenced in October to nearly four years in prison for fentanyl trafficking and money laundering. He admitted to selling roughly 1.5 pounds of fentanyl in July 2023 to a drug dealer in San Francisco. Upon a search of Grajeda-Varela’s Oakland residence, federal agents found 109 grams of fentanyl, more than six pounds of mannitol (a common mixing agent used to cut or dilute fentanyl), cocaine base, cocaine and heroin as well as drug distribution tools. Grajeda-Varela also admitted that, between March and August 2022, he laundered more than $200,000 in cash tied to the drug trade at America Latina, a money service business in Oakland; the funds were wired to recipients in Mexico and Honduras in the form of roughly 125 international wires.
Assistance From Whistleblowers
Whistleblowers continue to provide valuable contributions in both criminal and civil cases. Whistleblower information has led to successful criminal investigations, prosecutions and the collection of tax, fines, penalties, interest and other amounts. In FY24, the IRS paid awards totaling $123.5 million to whistleblowers for aiding in the collection of $474.7 million in proceeds on cases that included unreported/underreported income, hidden offshore assets, overstated deductions, general allegations of tax fraud and abusive international transactions.