The chair of the Senate Finance Committee, U.S. Sen. Ron Wyden (D-OR), is asking the Internal Revenue Service (IRS) to detail how proposed budget cuts would hurt efforts to crack down on funding for Hamas via fake charities, cryptocurrency, and other schemes.
The request comes on the heels of a proposal by House Republicans to cut funding for IRS enforcement — including enforcement against terrorist groups like Hamas — as the price of aid for Israel.
“The horrific terrorist attacks in Israel on October 7, which left more than 1,400 innocent Israelis and at least 30 Americans dead, thousands wounded, and hundreds taken hostage underline the importance of robust IRS funding,” Wyden wrote in a letter to IRS Commissioner Danny Werfel. “The IRS Tax Exempt and Government Entities Division can police fake charities and the IRS Criminal Investigation Division is one of the few law enforcement agencies with the skills to address sanctions evasion done via cryptocurrency.”
IRS Criminal Investigations successfully seized more than $3.5 billion of illicit cryptocurrency in the 2021 fiscal year, and $7 billion in 2022, Wyden explained. However, he noted that budget cuts have cost the IRS a significant portion of its workforce in the recent past. This has led to a roughly 50 percent drop in investigations of financial crimes, such as tax evasion, terrorist financing, sanctions evasion, and money laundering.
The Inflation Reduction Act included funding for tax enforcement, but Wyden said that is under threat by House Republicans.
Wyden said the proposed Republican cuts to IRS funding would amount to a “budget-busting gift to terrorists and tax cheats.”
Thus, Wyden is asking to IRS to outline just how the proposed budget cuts would impact its work to crack down on illicit finance, including fake charities, sanctions evasion, money laundering by terrorists, drug dealers and human traffickers, and other financial crimes.