In a report released on Thursday, federal parliament's powerful Joint Committee on Intelligence and Security found the IRGC met the legal threshold to be listed as a terror group under the criminal code.
The listing was introduced after intelligence assessments found the IRGC was responsible for attacks targeting Jewish sites.
The IRGC directed the firebombings of Jewish restaurant Lewis' Continental Kitchen in Sydney in October 2024 and Adass Israel Synagogue in Melbourne in December 2024, according to ASIO.
"ASIO assessed that these attacks were fostered by the IRGC through a complex scheme of proxies, in an attempt to conceal IRGC involvement," the report said.
"ASIO further assessed that the IRGC ... aimed to stoke fear and tensions within the Australian community and to harm the Jewish and Israeli community specifically."
The attacks led to the expulsion of Iran's ambassador from Australia in August.
The committee began its review in December and received 180 submissions, including from Iranian Australians.
"As someone who deeply cares for my Jewish friends and community, witnessing this fear, loss and erosion of security has been devastating," one submission read.
Community members told the committee they feared their activities in Australia were being monitored and reported to IRGC-linked networks, while some said family members in Iran had been threatened after they participated in protests abroad.
The committee said the terror listing would give law enforcement agencies stronger powers to disrupt IRGC-linked activity in Australia, including offences relating to membership, recruitment, financing and support.
However, it warned the framework must be backed by adequate resources to investigate financial networks, intimidation campaigns and the display of IRGC symbols.
The government should assess whether agencies including the Australian Federal Police and ASIO have sufficient resources to enforce the laws, the committee said.
The review comes as tensions in the Middle East escalate following US-Israeli air strikes killed Ayatollah Ali Khamenei and other senior Iranian leaders, triggering Iran to retaliate.
Foreign Affairs Minister Penny Wong said most Australians caught in transit in Middle East airline hubs have now returned home.
"If you can secure a seat, we believe people should be leaving," she told Sky News on Thursday.
"We don't want to see a situation where commercial flights, which are operating but obviously on a limited schedule, dry up.
"We hope that will not happen, but don't leave it too late."
