IRS CI Continues to Target Taxpayers and Tax Preparers for Pandemic-Era Fraud

While it remains to be seen what will happen to the Internal Revenue Service’s (IRS) enforcement resources in the coming months and years, at present, the IRS is continuing to actively target taxpayers and tax preparers for all forms of fraud. This includes fraud under pandemic-era programs. As Texas tax attorney Lawrence Brown explains, the IRS has been targeting fraud under these programs for several years now, pursuing both civil and criminal enforcement actions as warranted.

Criminal enforcement actions involve the IRS’ Criminal Investigations Division (IRS CI). In some cases, IRS CI initiates investigations based on information it receives from financial institutions and other federal agencies. In others, IRS CI investigations result from IRS audits that uncover apparent evidence of intentional tax evasion or tax fraud. In both scenarios, the risks involved are substantial, as criminal allegations can expose taxpayers and tax preparers to fines, prison time and other consequences.

When Are Taxpayers and Tax Preparers at Risk of Facing Scrutiny Related to Pandemic-Era Filings?

Recent IRS CI investigations have targeted taxpayers and tax preparers for a wide range of offenses involving the Paycheck Protection Program (PPP), Employee Retention Credit (ERC), Economic Injury Disaster Loan (EIDL) program, and other pandemic-era programs. This includes offenses committed directly by taxpayers, offenses facilitated by tax preparers who facilitate or encourage improperly claiming benefits, and offenses involving coordinated and large-scale schemes to fraudulently obtain millions of dollars in forgivable loans, tax credits and other program-related benefits. Some examples of common allegations in criminal investigations involving the PPP, ERC, EIDL, and other COVID-related programs include:

• Submitting fraudulent PPP and EIDL loan applications
• Submitting forged and falsified documents in support of PPP and EIDL loan applications
• Falsifying payroll figures and records when claiming the ERC
• Fraudulently certifying compliance with the terms of the PPP to obtain loan forgiveness
• In cases involving tax preparers, encouraging taxpayers to fraudulently claim pandemic-era tax benefits

Again, these are just examples. As you will see in the recent IRS CI enforcement actions discussed below, pandemic-related tax fraud allegations can take many other forms. Given the total amount of fraud committed under COVID relief programs (which is estimated to be in excess of $2 trillion), targeting COVID-era fraud continues to be a highly effective way for the IRS to aid in the federal government’s fight against fraud, waste, and abuse.

Examples of Recent IRS CI Enforcement Actions Targeting Pandemic-Era Fraud

To get a sense of the scope of the IRS’s ongoing efforts to target fraud under COVID-era programs (both during and after the pandemic), we can look at some of IRS CI’s recent enforcement actions. Here are five of the most recent examples from 2025:

Taxpayer Sentenced for Perpetrating $2.3 Million COVID Loan Scheme and Fraudulently Claiming $1.3 Million in Employee Retention Credits

On February 28, 2028, IRS CI announced that a taxpayer was sentenced to restitution and 60 months in federal prison after pleading guilty to fraud under the PPP, EIDL, and ERC programs. According to IRS CI, the taxpayer submitted more than 80 fraudulent PPP and EIDL loan applications on behalf of approximately 20 companies, securing nearly $2.3 million in fraudulent loans.

IRS CI’s press release also states that the taxpayer fraudulently claimed approximately $1.3 million in credits under the ERC program. Even though the IRS did not pay these credits, the taxpayer’s attempt to defraud the IRS nonetheless resulted in criminal charges.

Taxpayers Sentenced After Pleading Guilty to Fraudulently Applying for EIDL Loans and Pandemic Unemployment Assistance Benefits

On March 7, 2025, IRS CI announced that two taxpayers were sentenced to restitution and federal prison time for defrauding the EIDL program and fraudulently applying for Pandemic Unemployment Assistance Benefits. According to IRS CI:

“[The defendants] conspired to use over 20 stolen identities and the identities of co-conspirators to apply for [EIDL] and Pandemic Unemployment Assistance benefits. . . . Each loan application submitted by [the defendants] contained false statements, misrepresentations, and omissions related to income, employment, and claimed business entities.”

IRS CI’s press release states that the defendants received approximately $1 million in fraudulent loan proceeds. It indicates that the defendants used various nominee bank accounts as well as the bank accounts of friends and family members to try to conceal the fraud.

Tax Preparer Charged with Submitting More Than $2 Million in Fraudulent PPP Loan Applications from 2020 to 2022

On March 10, 2025, IRS CI announced the arrest of a tax preparer who is charged with submitting more than $2 million in fraudulent PPP loan applications over the course of three years. As stated in IRS CI’s press release:

“The indictment . . . alleges [the defendant] attracted and induced clients to hire her to apply for PPP loans through paid radio commercials and social media . . . [and] allegedly sent and caused to be sent to a credit union PPP loan applications which contained material misrepresentations and omissions. Unbeknownst to her clients, [the defendant] allegedly included false federal income tax documentation, false information about her clients’ businesses . . . .”

The defendant is facing charges for bank fraud, wire fraud, money laundering, structuring transactions to evade reporting requirements, aggravated identity theft, and making false or fictitious claims. If convicted, she could face decades of federal prison time.

Tax Preparer Ordered to Pay $10.2 Million in Restitution for COVID-Era Fraud

Also, on March 10, 2025, IRS CI announced the sentencing of a tax preparer who pled guilty to committing more than $10.2 million in tax fraud, including fraud under the PPP. According to IRS CI, the tax preparer admitted to submitting fraudulent returns for clients and himself in addition to submitting fraudulent PPP loan applications. IRS CI states that under the tax preparer’s plea agreement, he will serve nearly five years in federal prison and pay more than $10.2 million in restitution.

Request a Confidential Consultation with Texas Tax Attorney Lawrence Brown

If you are facing scrutiny from IRS CI as a high-income taxpayer or tax preparer—or if you have concerns about facing scrutiny from the IRS or IRS CI—it is critical that you engage experienced defense counsel promptly. To request a confidential consultation with Texas tax attorney Lawrence Brown, please call 888-870-0025 or tell us how we can contact you online today.