October 31,2023

Wyden: IRS Budget Cuts Will Damage Efforts to Crack Down on Hamas Funding via Fake Charities, Cryptocurrency and other Schemes

IRS Investigators are Crucial to Identifying Hamas Efforts to Dodge U.S. Sanctions

Washington, D.C. – Senate Finance Committee Chair Ron Wyden, D-Ore., today asked the Internal Revenue Service to detail how proposed budget cuts would hamper efforts to crack down on funding for Hamas via fake charities, cryptocurrency and other schemes. 

“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.  

House Republicans are proposing to slash funding for IRS enforcement, including enforcement against terrorist groups like Hamas, as the price of aid for Israel.

Wyden noted that IRS Criminal Investigations successfully seized more than $3.5 billion of illicit cryptocurrency in the 2021 fiscal year, and $7 billion in 2022. However, budget cuts have cost the IRS a significant portion of its workforce in the recent past, leading to roughly 50% fewer investigations of financial crimes such as tax evasion, terrorist financing, sanctions evasion and money laundering, according to the agency’s statistics. 

The Inflation Reduction Act provided a much-need influx of funding for tax enforcement, which is now under threat by Republicans.  

Deeper cuts to IRS funding, as proposed by Congressional Republicans, would amount to a “Budget-busting gift to terrorists and tax cheats,” Wyden said. 

Wyden requested the IRS detail how budget cuts proposed in Congress would impact its work to crack down on illicit finance, including “how the cuts would affect the IRS’s ability to address fake charities, sanctions evasion, money laundering by terrorists, drug dealers and human traffickers, and other financial crimes.”

Read the full letter to the IRS here.