DOJ is urged not to dissolve its tax division in restructuring

Former U.S. tax officials urged the Justice Department not to dismantle its tax division in an agency-wide reorganization, warning that such a move would hobble enforcement. 

More than 60 lawyers wrote Wednesday in response to a March 25 memo by Deputy Attorney General Todd Blanche that called for a broad reorganization of the department, including reassigning tax lawyers around the country while keeping a “core team of supervisory attorneys” in Washington. 

“Dismantling the tax division would do a grave disservice to tax administration by destroying consistent and competent application of our tax laws,” the lawyers wrote. Many of them served in top posts at the tax division and the Internal Revenue Service. 

The letter, also signed by leading tax practitioners, comes as senior officials in the Justice Department’s antitrust division are trying to shield key aspects of that work from the cutbacks. The cuts are part of President Donald Trump’s broader effort to downsize the federal government. 

A spokesperson for the Justice Department declined to comment on the letter. 

The tax division’s 350 or so lawyers work in 14 civil, criminal and appellate sections and support the IRS in collecting taxes and prosecuting fraud. They work closely with the 93 U.S. attorney’s offices across the country and approve all tax prosecutions.

But the division is smaller than several others at the Justice Department and hasn’t had a Senate-approved leader for more than a decade. The IRS had cut back on tax enforcement cases for years, and Trump vowed to reverse hiring increases backed by former president Joe Biden. 

Division lawyers pursue a wide range of cases, including multibillion-dollar disputes like one involving Caterpillar Inc., as well as prosecutions over tax preparers and tax shelters. They have pursued cases over COVID-19 payments, cryptocurrency scams and bankruptcy frauds. 

“The tax division is successful in carrying out this difficult and diverse mission because of principles it is designed around and fosters: technical competence, centralized leadership and collaboration,” the tax experts told Blanche in the letter. They “regularly litigate cases against the nation’s best-trained and best-funded private sector tax lawyers.” 

Many of those lawyers signed the letter, including former IRS commissioner Charles Rettig, former deputy attorney general Rod Rosenstein and Michael Desmond, a former IRS chief counsel.