On March 28, 2025, the Internal Revenue Service ("IRS")'s criminal investigative arm, IRS Criminal Investigation ("IRS-CI"), announced that it would be implementing a new program called CI-FIRST (Feedback in Response to Strategic Threats) to foster ongoing engagement with financial institutions and to provide feedback on how IRS-CI uses data collected pursuant to the Bank Secrecy Act ("BSA").1
Under the BSA, most financial institutions must file suspicious activity reports ("SARs") to notify the federal government of instances of suspicious transactions relevant to a possible violation of law or regulation, including money laundering or tax evasion.2 Financial institutions must also file currency transaction reports ("CTRs") to report physical cash transactions of more than $10,000.3 This data is used by law enforcement agencies, like IRS-CI, to investigate and prosecute financial crimes.
In this Legal Update, we provide a summary of recent statistics published by IRS-CI regarding its use of BSA data and its new initiative to improve communications with financial institutions regarding their SAR filings.
IRS-CI Statistics Regarding BSA Data
In its announcement, IRS-CI released statistics highlighting the agency's use of BSA data to investigate financial crimes. According to IRS-CI, in the last three years, the primary subjects of 87.3% of all investigations recommended for prosecution were persons identified in a BSA filing,4 and cases adjudicated by IRS-CI resulted in a 97.3% conviction rate, with defendants receiving average prison sentences of 37 months. This means that a substantial number of cases recommended for prosecution and ultimately resulting in a conviction had a corresponding BSA filing. IRS-CI also used BSA data to identify $21.1 billion in fraud tied to tax and financial crimes, seize $8.2 billion in assets tied to criminal activity, and obtain $1.4 billion in restitution for crime victims, further highlighting the utility of BSA data in prosecuting financial crimes.5
Additionally, IRS-CI reported that its special agents ran an average of 966,900 searches per year against CTRs during the last three fiscal years. IRS-CI's statistics suggest that CTRs of relatively low dollar amounts have been useful for the agency, as 67.4% of cases opened by IRS-CI had a subject with one or more CTRs below $40,000, and 50% of CTRs involved amounts less than $22,230. IRS-CI also mentioned that BSA data has assisted its efforts to combat narcotics trafficking and pandemic-era tax fraud.6 Since fiscal year 2020, IRS-CI used BSA data to initiate almost 1,300 investigations with ties to fentanyl and investigate alleged employee retention credit fraud totaling $5.5 billion.
Although the statistics released by IRS-CI highlight the utility of BSA data in its investigations, a recent US Government Accountability Office ("GAO") report published in December 2024 suggests that law enforcement agencies encounter challenges in effectively using BSA data. The GAO's report found that law enforcement agencies only accessed a small percentage of CTRs through either the Financial Crimes Enforcement Network's ("FinCEN") BSA Portal or federal agencies' internal systems, leaving most of the data unused.7 From 2014 through 2023, law enforcement agencies accessed only about 5.4% of CTRs filed in FinCEN's BSA Portal during that period. IRS-CI's press release also seems to acknowledge that there have been barriers to effectively using BSA data, and the IRS-CI's new initiative seeks to enhance the information-sharing process.
CI-FIRST Initiative
To address some of the obstacles associated with using BSA data to investigate money laundering and related financial crimes, IRS-CI announced a new initiative to improve the information-sharing process with financial institutions and obtain higher-quality information that assists the agency in its investigations. Among other things, IRS-CI stated that the CI-FIRST program will ensure that financial institutions receive quantifiable results from IRS-CI on how the agency uses SARs to investigate federal crimes. IRS-CI will also streamline subpoena requests and share pointers with financial institutions on what to include in SARs to maximize impact. IRS-CI headquarters will work with larger financial institutions that have a national and international presence, and field office personnel will work with regional and community banks and credit unions in their respective areas of responsibility.
Takeaways
IRS-CI's information-sharing program highlights how law enforcement agencies are pursuing initiatives to increase coordination with financial institutions and effectively use BSA data that has historically been underutilized. Additionally, the implementation of the CI-FIRST program may be an opportunity for financial institutions to provide feedback to regulators about specific challenges and burdens with collecting information for SARs. The IRS-CI's CI-FIRST initiative is an important first step towards improving the quality and utility of SARs, and FinCEN and other law enforcement agencies may follow suit.
Footnotes
1. Internal Revenue Service, IRS-CI releases FY24 BSA metrics, announces CI-FIRST initiative, (Mar. 28, 2025).
2. See, e.g., 31 C.F.R. § 1020.320.
3. See 31 C.F.R. § 1010.311.
4 . The IRS-CI release does not define "BSA filings," nor does it otherwise indicate whether the referenced BSA filings include SARs, CTRs, and/or potentially other filings required under the BSA, such as the Report of Foreign Bank and Financial Accounts.
5. Internal Revenue System, IRS-CI releases FY24 BSA metrics, announces CI-FIRST initiative.
6. Id.
7. US Government Accountability Office, Currency Transaction Reports: Improvements Could Reduce Filer Burden While Still Providing Useful Information to Law Enforcement, (Dec. 11, 2024) .
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