Federal tax prosecutions in the United States have dropped to their lowest level in decades, plunging by more than 27% over the past year, according to a Reuters investigation. The sharp decline follows major staffing cuts and policy shifts under President Donald Trump’s administration, which has redirected law enforcement resources toward immigration enforcement.
The administration’s overhaul of the Justice Department and the Internal Revenue Service (IRS) has drastically reduced the number of attorneys and agents pursuing tax crimes. Government data and interviews with current and former officials indicate that some remaining personnel were reassigned to assist with immigration cases or street patrols in Washington, D.C.
At the same time, the Justice Department closed its Tax Division, a key office overseeing criminal tax prosecutions since the 1930s. Officials said roughly one-third of the 80 prosecutors who worked there resigned rather than accept reassignment.
The federal government estimates that it fails to collect nearly $700 billion in taxes owed each year. Although criminal prosecutions account for only a small fraction of this amount, experts warn that weakened enforcement could embolden tax evaders.
“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 senior fellow at the Tax Law Center at New York University and former acting head of the Justice Department’s Tax Division.
Sharp Decline in Tax Cases
Reuters reviewed federal court records and found that the number of Justice Department attorneys involved in tax prosecutions fell from about 420 last year to 160 this year.
Three people familiar with internal deliberations said senior Trump officials had informed prosecutors that tax investigations were “not a priority.” One participant said the new leadership was “very skeptical about white-collar crime and whether we should be doing those cases.”
Justice Department spokeswoman Natalie Baldassarre defended the restructuring, saying the closure of the centralised tax-crimes office “will not impact the ability of its civil litigators and criminal prosecutors to advance its mission to fairly and consistently enforce the nation’s tax laws.”
However, the IRS confirmed a reduction of 330 criminal enforcement employees this year, even as the agency faces a backlog of uncollected revenue and a surge in complex financial crimes.
Broader Enforcement Shift
The administration’s focus on immigration has further strained tax enforcement. The IRS’s criminal investigations unit lost more than 10% of its workforce between January and June, according to the National Taxpayer Advocate, which also reported that overall IRS staffing has fallen by more than a quarter.
Some IRS agents have been reassigned to non-tax duties, including crime patrols in Washington, D.C., as part of President Trump’s effort to show a tougher stance on street crime. Two officials said the Washington field office initially assigned only a few of its 60 agents to these patrols, but after pressure from senior aide Stephen Miller, the number increased to over 20.
“The investigators who remain are being pulled in a lot of directions,” said a former Justice Department official. “The damage being done is significant.”
Impact on Legal Expertise
The drop in prosecutions has also coincided with an exodus of experienced lawyers from U.S. attorneys’ offices. More than 1,000 federal prosecutors have left the department this year, roughly double the number who departed in prior years.
Valerie Makarewicz, who recently left the Los Angeles U.S. Attorney’s Office, said her team once had 10 prosecutors handling tax cases, but now only “three or four” remain.
“It’s a niche field, and developing that expertise takes time,” she said.
Data and Trends
Reuters’ analysis of federal criminal case dockets dating back to the 1990s showed that by November 1, only 251 individuals had been charged with tax-related crimes in 2025, a 27% decline from the same period last year.
The slowdown coincides with ongoing reviews by the Trump administration of past Justice Department investigations for alleged “political bias.” No evidence has been presented to substantiate such claims.
In one high-profile case, cryptocurrency investor Roger Ver, known as “Bitcoin Jesus,” accused the Justice Department of politically motivated prosecution over charges of tax evasion. Ver later reached a deferred prosecution agreement with the department — negotiated by attorneys linked to Trump allies, allowing him to avoid conviction in exchange for paying nearly $50 million to the U.S. government.
A Changing Enforcement Landscape
As the Justice Department’s priorities shift, experts fear that the decline in tax prosecutions could weaken deterrence and further widen the gap between taxes owed and taxes collected.
For many observers, the trend reflects not just budget cuts but a deeper institutional retreat from white-collar enforcement, one that may take years to reverse.
