On March 25, a memorandum from the Deputy Attorney General solicited feedback from Department of Justice Component Heads on proposals his office had already submitted to the Office of Personnel Management and the Office of Management and Budget. He gave the component heads one week to respond. The proposals concern the DOJ’s potential reorganization and reductions in force. Among the proposals is to “reassign[] TAX personnel to the U.S. Attorneys’ Offices while maintaining a core team of supervisory attorneys to administer relevant provisions of the Justice Manual.”
Although the memorandum does not use these words, this proposal has been described as abolishing or eliminating the Tax Division. And that is what it would amount to.
Sixty-two professionals with decades of experience working in all aspects of the tax system submitted a letter to the Deputy Attorney General explaining why reassigning Tax Division attorneys to United States Attorneys’ Offices would be unwise. The letter details the training, collaboration, and other aspects of the Tax Division’s work that they know from experience can only be accomplished because Tax Division attorneys work together as a team.
To reassign Tax Division attorneys to United States Attorney’s Offices would be to abandon the nationwide uniformity and consistency in the defense and enforcement of the tax laws that has been the very purpose of the Tax Division since its establishment in 1934.
Tax Division attorneys engage in several types of trial work. In addition to prosecuting tax crimes, they engage in affirmative and defensive civil litigation. They also handle the appeals of trial court decisions, civil and criminal, including decisions of the U.S. Tax Court, where IRS attorneys conducted the trial.
It is the rare tax case that is one-of-a-kind. Each represents the opportunity, if the government loses, for innumerable other businesses or individuals to take advantage of the weakness just uncovered. So every case carries with it the weight of every similar case that might be presented. Each case also presents the opportunity for a different result in the various trial and appellate courts across the country. Preventing inconsistent results in different parts of the country is among the Tax Division’s most important missions.
In recent years, the Tax Division’s affirmative civil litigation—suits against businesses and individuals to collect unpaid taxes—yielded an annual average of nearly $250 million, more than its annual budget. Defensive litigation—suits against the government for a refund of taxes paid—often involves more than $10 billion at any given time.
But those amounts tell only a fraction of the story. They are dwarfed by the amounts that would be lost to the Federal Treasury if the government loses or fails to pursue or defend these cases. Results in the division’s cases establish precedents that save or cost the federal treasury.
Successful Tax Division initiatives like the one to enjoin and then prosecute fraudulent tax return preparation operations and the one to defeat complex tax shelter schemes for wealthy individuals could not have been developed or implemented with a workforce distributed among 94 United States Attorney’s Offices. The co-location of Tax Division personnel was essential to these efforts.
As described in the letter signed by 62 knowledgeable individuals, challenges to the tax system are continuously developing and must be met by a prepared and coordinated Tax Division.
Although the results of Tax Division attorneys’ efforts only become evident when they appear in courtrooms around the country, the efforts themselves happened back in the Tax Division offices, in the specialized tax litigation training the division provides, and in the collaboration with their colleagues.
Making U.S. Attorneys responsible for tax cases would put bringing and defending tax cases at the mercy of other priorities of each district. Would a U.S. Attorney facing a spike in federal gun or drug crimes, for example, be able to resist redirecting the Tax Division attorney resident in his office to those other urgent priorities? We know from experience that the answer is no.
For a Tax Division attorney, working in a United States Attorney’s Office would be working remotely. Phone calls and emails are no substitute for face-to-face, in-person daily contact with people who are now working, or have before worked, on similar cases. Keeping the Tax Division intact is consistent with the President’s return-to-office order.
Keeping the Tax Division intact is also consistent with the President’s demand that the federal workforce be as efficient and productive as possible. It is through the training, mentorship, supervision, and sharing of best practices made possible by physically working together that Tax Division attorneys maximize their effectiveness and productivity.
It is not hyperbole to predict that reassigning Tax Division attorneys to United States Attorney’s Offices would be catastrophically counterproductive.
The reasoning behind the thinking associated with eliminating the Tax Division needs to be understood as the same reasoning associated with eliminating other bureaucracies. It is not just about saving money. It is not just about fraud, waste and abuse. It is because the perception, the reality, the facts and evidence makes it abundantly clear that many of these agencies have become politicized and use their power to traumatize, psychologically and economically, people whose only crime is being politically active. In other words they are weaponized as much as the FBI, CIA, EPA and DHS bureaucracies have been.
They need to regain trust. That is something that starts with making certain that the attorneys are not hyper partisan and can be trusted to treat everyone fairly and equally under the law.