An Obituary for DOJʻs Tax Division
The following is an article drafted by Karen Kelly, former head of the DOJ Tax Division and a DOJ veteran of almost 30 years. We are publishing this article with her permission.
The Department of Justice implemented changes at a furious pace in 2025. Many of these changes were executed abruptly, received little media attention, and have the potential to reshape the future of law enforcement in the United States.
One such change was eliminating DOJ’s Tax Division, a standalone component that enforced the fair and uniform enforcement of civil and criminal tax laws for 90 years. Its elimination was executed in less than nine months and represents a fundamental change in the structure of DOJ and tax enforcement.
Created in 1934, the Tax Division provided certainty and consistency in civil and criminal tax enforcement with their review protocols and litigation in federal district, appellate, and claims courts. Today, with the Tax Division gone, civil tax matters are handled by trial attorneys assigned to a new tax branch in the department’s Civil Division. Criminal tax trial attorneys for six months were reassigned to a new tax section in the Criminal Division. However, as announced last week, these tax attorneys will join the newly created National Fraud Enforcement Division. They are supervised by generalists with no background or expertise in tax enforcement or litigation.
The Tax Division’s elimination is far more significant than observers might believe, since American citizens and businesses rely on stability in the application of tax law to make financial decisions and future forecasts. As the former head of the division, where I served for almost 30 years and recently left, I fear this reckless move has left our tax system far more vulnerable.
The Purpose Behind a Standalone Tax Division
In 2024, there were 161 million individual income tax returns filed with the IRS - and if you include corporate, partnership, trust and estate tax returns that number increases to 190 million.
Each of these tax filers is impacted by the interpretation and enforcement of tax laws, and the Tax Division’s mission was to enforce the nation’s tax laws “fully, fairly, and consistently.” It did this through both criminal and civil litigation to promote voluntary compliance with the tax laws, maintain public confidence in the integrity of the tax system, and promote the sound development of the law.
To carry out that mission, Tax Division attorneys worked with the IRS to enforce the tax code and handled disputes about the tax laws in court. The Civil Tax Division attorneys reviewed, consulted, resolved, supervised, litigated, and appealed all tax matters referred by the IRS or filed by taxpayers outside the Tax Court. Similarly, the criminal Tax Division attorneys applied uniform standards of review to all criminal tax matters generated by the IRS’s criminal investigators (IRS-CI) before they were referred to U.S. Attorney’s Offices for prosecution. In addition to the review function, the Tax Division supervised and litigated these criminal tax matters throughout the United States.
The Internal Revenue Code and its regulations are notoriously complex and ever changing, making it crucial to maintain experienced professionals with extensive institutional and subject-matter knowledge to supervise enforcement. Ensuring that the federal government spoke with one voice on the application of tax laws provided certainty to taxpayers, allowing businesses and individuals to plan their finances in an informed way.
It was also popular. A 2024 IRS study found that 84% of Americans supported a fair and honest tax system, which the Tax Division fostered. The same study also found that increased trust in the IRS’s ability to enforce tax law fairly and consistently strongly correlates with voluntary compliance.
Tax Division’s Previous Structure
Since the Tax Division no longer exists, it’s vital that we memorialize the authorities it had and how it was structured so that history can inform future rebuilding plans.
The Tax Division had authority over review and supervision of all matters arising under the revenue laws, which required a robust staff to carry out. It employed more than 500 attorneys, executives, human resource professionals, IT experts, paralegals and litigation support personnel, management and budget professionals, support staff, and contractors in 2024. The division was supervised by a Senate-confirmed Assistant Attorney General, supported by three to five experienced tax attorneys who served as Deputy Assistant Attorneys General responsible for policy, review, criminal and civil matters, and appellate cases – including supporting the Solicitor General with cases before the Supreme Court. An ethics officer counseled on tax issues and collaborated with other DOJ offices on department-wide ethics, discovery, and training.
The Civil trial sections were divided into six geographic regions plus a Court of Federal Claims section, each led by a Section Chief supported by two to three Assistant Chiefs. The Civil trial attorneys handled the wide range of cases in their region, and senior litigation counsels handled the most sophisticated tax matters regardless of region.
The Criminal Enforcement sections were divided into their own geographic regions. The sections had an Appeals Tax Enforcement and Policy unit, known as CATEPS, which handled appeals. Each of the trial sections was led by a Section Chief and two to three Assistant Chiefs. The Trial Attorneys, Assistant Chiefs, and Chief handled all aspects of criminal tax litigation within the assigned region.
Like any organization, the Tax Division wasn’t perfect – but I think that most who worked there would agree that it functioned well. Its longstanding structure was sensible and its exclusive focus on tax matters aided enforcement goals and coordination with the IRS. Perhaps most galling about the evisceration of an almost century-old institution – one whose enforcement generated hundreds of millions of dollars for the American people annually – is that the administration failed to provide any substantive reason to justify its elimination. It destroyed a respected, high performing, and high revenue-generating DOJ component that wasn’t broken.
The Uncertain Future of Tax Enforcement
In March 2025, DOJ leadership proposed eliminating the Tax Division and relocating all of its attorneys into U.S. Attorney’s Offices throughout the country – a plan that sent shockwaves through the division’s personnel. The administration later reconsidered that plan and instead reassigned the former Civil tax attorneys to a new Tax Litigation Branch in the Civil Division, while the Criminal attorneys became part of a new Tax Section in the Criminal Division. That change became effective on November 30, 2025.
But that assignment was brief. Unexpectedly, on April 7, 2026, it was announced that the criminal tax enforcement arm would relocate from the Criminal Division to the newly created National Fraud Enforcement Division.
On paper, this may look like a mere restructuring. The change, however, has dramatically affected the expertise of those overseeing tax enforcement.
On the Civil side, there is now one Deputy Assistant Attorney General with tax expertise. The Criminal side is now overseen by a leadership structure that is entirely new, and it is unclear if the higher-level supervisors will have any knowledge of tax law.
The elimination of the tax division also prompted many - like me - to leave the department altogether. Today there are far fewer experienced tax attorneys in both the Civil and Criminal sections to handle tax cases throughout the United States. The collective loss of institutional knowledge and expertise is profound, especially in an area as specialized as tax litigation.
Those who remain are part of two very large divisions with very broad missions. Without a dedicated division and Assistant Attorney General whose sole focus is tax enforcement, it is unlikely that tax enforcement will remain a top priority as it had been throughout the Tax Division’s history – and the institutional losses we’ve already experienced gravely threaten the consistent and fair implementation of tax laws.
Karen Kelly is the former head of the Justice Department’s Tax Division, where she worked for almost 30 years. She now practices tax law as a partner at for Kostelanetz LLP.
