# DOJ Closes CrowdStrike IRS Cybersecurity Probe

The U.S. Department of Justice (DOJ) has closed its investigation into CrowdStrike Holdings concerning revenue recognition practices related to a **$32 million cybersecurity software contract awarded in 2023** through distributor Carahsoft for the Internal Revenue Service (IRS). No enforcement action was taken by the DOJ, but the Securities and Exchange Commission (SEC) continues its separate inquiry into CrowdStrike's revenue reporting. This development underscores ongoing regulatory scrutiny of federal cybersecurity contractors and highlights the importance of transparent financial practices in government procurements.

- **Why this matters:** Procurement professionals and contractors should be aware that federal cybersecurity contracts, especially high-value deals like the IRS contract, may attract regulatory attention beyond contract performance, including financial and revenue reporting compliance.
- The closure of the DOJ probe without action may reduce immediate legal risks for contractors but does not eliminate potential SEC investigations, which could impact contractor reputations and future eligibility.
- Agencies and contractors should prioritize rigorous compliance with financial disclosure and revenue recognition standards to mitigate risks in federal cybersecurity procurements.
- This case illustrates the critical role of distributors like Carahsoft in facilitating large federal IT acquisitions and the need for transparency across the supply chain.

**Jurisdictions:** federal
**Industries:** Information Technology
**Topics:** Cybersecurity
**Published:** September 25, 2026

### Government Entities
- Department of Justice (DOJ)
- Securities and Exchange Commission (SEC)
- Internal Revenue Service (IRS)
- Department of Defense (DOD)
- Office of Management and Budget (OMB)

### Vendors
- CrowdStrike Holdings (prime contractor)
- Carahsoft (distributor)

### Sources
- [CrowdStrike DOJ Investigation Closed Without Action After Scrutiny of $32 Million IRS Deal | Quiver Quantitative](https://www.quiverquant.com/news/CrowdStrike+DOJ+Investigation+Closed+Without+Action+After+Scrutiny+of+%2432+Million+IRS+Deal) - Quiver Quantitative