Karen Kelly Article on Federal Tax Prosecutions Before and After Department of Justice Tax Division Is Eliminated (10/19/25)

I point DOJ Tax Alumni to Karen Kelly and Caroline Rule’s article titled Federal Tax Prosecutions Before and After Department of Justice Tax Division Is Eliminated (White Collar Crime Litigation 9/22/25), here. Kelly was formerly a leader in the Tax Division before its demise at the behest of the Trump Administration. Kelly is now with Kostelanetz where Caroline Rule is a partner. Caroline Rule is a major force in tax crimes.

I have been trying to determine how the DOJ Tax functions would be folded into the DOJ Civil and Criminal Divisions, respectively. The article says:

According to the reorganization, the Civil Tax Division attorneys and the Criminal Tax Division attorneys will be relocated from the Tax Division into their respective components  at the DOJ: the DOJ Civil Division and the DOJ Criminal Division. There will then be a separate tax section within each division. Within the Civil Division, the tax attorneys will be renamed the Tax Litigation Section, which will include the six geographical Civil Trial Sections, 1 the Court of Federal Claims unit, the Office of Review, and the Appellate unit. On the criminal tax side, the attorneys will be moved into the Tax Section of the Criminal Division, which will include the three geographical regions and the Criminal Appeal unit. At least initially, the criminal attorneys will continue to be organized by geographic regions within the Tax Section. Presently, the regions are Northern Criminal Enforcement Section, Southern Criminal Enforcement Section, and Western Criminal Enforcement Section.

I infer that the pyramid structures in both DOJ Tax Civil and Criminal will be moved into the DOJ Civil and Criminal Sections, respectively. Presumably, some of the top level DOJ Tax Civil and Criminal Sections functions will be thinned out or eliminated, but some type of pyramid structure will remain. The basic work functions to line level attorneys will remain the same.

I await an org chart from the DOJ Civil and Criminal Divisions to get a better fix on this.

Editorial Comment by Former DOJ Tax Prosecutor on The Federal Prosecutor’s Decision Not to Charge (10/17/25)

DOJ Tax Alumni may be interested in this Editorial Comment by a DOJ Tax Alumnus, Mike Romano: The Federal Prosecutor’s Decision Not to Charge (Justice Connection 10/17/25), here

. A somewhat long excerpt from the beginning:

The decision not to charge someone is a critical part of a prosecutor’s job, but it often goes unseen. I learned this first-hand during my 18 years as a DOJ prosecutor – prosecuting tax fraud across the country, violent crimes in Washington, D.C., then January 6 cases with the Capitol Siege Section, and later public corruption cases with the Public Integrity Section (before this administration dismantled it.

Criminal charges, after all, come with a host of consequences, whether or not the person charged is ever convicted. Police may take the person into custody, depriving them of their liberty, even if only for a few hours. They may be compelled to appear in court and sit through a trial, both of which are further deprivations of liberty. That person will need a defense attorney, the cost of which can be astronomical. And the mere fact of criminal charges, and an arrest record, can cause real harm to a person’s reputation and employability, even if that person is never convicted.

Every federal prosecutor I worked with took the decision to charge—or, not to charge—extremely seriously. And when an investigation convinced me that no crime had been committed, or the wrong person had been accused, I was proud not to bring charges, or to dismiss charges that were unwarranted.

Doing this was my legal, ethical, and moral obligation; it was, in my view, the sort of exercise that made the Department’s use of power legitimate.

Justice Department prosecutors have a guide called the Principles of Federal Prosecution, which helps them determine when a case should or should not be brought. One of those principles is the following:

[A]s a matter of fundamental fairness and in the interest of the efficient administration of justice, no prosecution should be initiated against any person unless the attorney for the government believes that the admissible evidence is sufficient to obtain and sustain a guilty verdict by an unbiased trier of fact.

Romano's editorial comments echo the foundational speech by Attorney Robert Jackson later Supreme Court Justice) in 1940, titled The Federal Prosecutor, DOJ link here; alternative link here. (I provide an alternative link because I can't be sure it will stay on the DOJ website since its sentiments are not the sentiments of the current powers that be in DOJ.)

Fillable On-Line Form to Assess Interest in DOJ Tax Alumni Reunion/Wake (10/7/25)

In the immediate past post, I sought input on the possibility of a DOJ Tax Division Alumni Reunion/Wake in May 2025 at the time of the ABA Tax Section Meeting May 7-9, 2026. I have set up a Google Form for Alumni to state their interest.

The Google Form is here: https://forms.gle/pGkKfz73NUvSQ1EAA

I urge Alumni who may be interested to complete the form so that those in the planning group (yet to be formed) can gauge interest and identify an appropriate venue for the event.

Also, since the DOJ Tax Alumni are far larger in number (by many multiples) than my current email list, please forward the link to the Form to as many DOJ Tax Alumni as you know. I will regret Alumni who might be interested not knowing of the event.

Thank you.

Jack Townsend.

Assessing Interest in a Final DOJ Tax Division Alumni Reunion/Wake and Making it Happen (10/4/25)

Alumni may remember that in the 1990s and early 2000s, we had 5-year Tax Division Alumni Reunion Events. With the demise of the Tax Division, I thought it might be appropriate to have a final reunion/wake. As before, I think the best time is contemporaneous with the ABA Tax Section May Meeting, the next being May 7-9, 2026, which might attract many non-D.C. area alumni to attend.

Please share your thoughts on whether this is a feasible project. And let me know your thoughts as to how to make it happen. Additionally, some volunteers to help make it happen would be greatly appreciated.

Please share this information with alumni you may know so that, hopefully, we can make the event as well attended as possible.

You may email me at jack@tjtaxlaw.com or comment below.

Thanks,

Jack Townsend

Update on Demise of Tax Division (9/28/25)

The Tax Division is no more (except as its residue now resides in the DOJ Civil and Criminal Sections). See Francesca Ugolini, A Eulogy for the Tax Division, (Tax Notes 9/23/25), here; and Nathan Richman, Dismantling of Justice Department’s Tax Division Has Resumed (Tax Notes 9/26.25), here.

1. The main Tax Division web site has been taken down and now appears as an archive page here.

2. It is unclear how the organizational structures of the Civil and Criminal Divisions will change with the incorporation of the Tax Division functions. As of this posting, the web pages for the Civil and Criminal Divisions do not indicate anything about the reorganization.

3. I suspect that the line attorneys doing the litigation work will continue as before with no substantial disruption of their work.

4. There will have to be conforming changes to the Justice Manual and the Criminal Tax Manual. Similarly, there will have to be changes to the IRS’s IRM and other publications referring to the Tax Division. I presume that conforming changes will take some time and may occur piecemeal.

5. The Wikipedia Page, here, says it was last edited on August 17, 2025, but does not mention the reorganization and the information on the page is substantially out of date (e.g., the Division Executive is said to be David A. Hubbert, Acting Assistant Attorney General, who left that role in January 2025). See Deputy AAG Tax Hubbert Removed and Reassigned to Sanctuary City Program (Whatever That Is) (DOJ Tax Division Alumni Blog 2/7/25; 2/11/25), here.

Death of Michael L. (“Mike”) Paup (8/24/25; 8/27/25)

Mike Paup passed away on August 20, 2025. His obituary is here. The obituary says "No services are scheduled at this time." My understanding is that there may be no services. However, the obituary page does offer an opportunity to post memories. As of this morning, there has been one posting. I am sure others will follow. Alternatively, those wishing to post memories on this blog as comments, please do so. I moderate comments but get notice of the need to moderate, so approval should be fairly current.

Added 8/27/25 @ 11am: The obituary linked above has been filled out with more detail. The Washington Post Obituary is here. One thing I noticed in both obits is that Mike received an LLB. We old timers remember that law schools began to change the basic law degree from LLB to JD, starting as I recall it in the 1960s. My class at UVA Law '67 voted down a proposal to change our degree. Nevertheless, at some time thereafter, UVA Law changed from LLB to JD, but apparently had not made that change by the time Mike graduated in 1969. I infer that Mike declined, as did I, when UVA Law offered to change the degree from LLB to JD.

I have been able to piece together a brief professional bio for Mike as follows:

Mike was born in Kansas on Oct. 27, 1941, and grew up in Wichita,  where he graduated from high school in 1959.  He graduated from Columbia University in 1963 and the University of Virginia Law School in 1969, where he served on the Law Review and was Order of the Coif. Mike joined the DOJ Tax Division Appellate Section in July 1969 and became a Reviewer there in 1973 or early 1974. Mike became Chief of the Appellate Section in 1980, and then Deputy Assistant Attorney General overseeing the Civil Trial Sections in late 1987. He was one of a handful of Appellate Section attorneys selected by the SG's office to present the oral argument to the Supreme Court, arguing (and winning)  United States v. Fulman, 434 U.S. 528 (1978). He received a Presidential Rank Award for Distinguished Service (the highest award given to those in the Civil Service (year perhaps 1990)). In 1995, Mike left DOJ Tax to become "Special Counsel" to Stuart Brown, then Chief Counsel of the IRS.  He served in that capacity for several years before retiring in the early 2000s.

I served with Mike in DOJ Appellate from 1969 to 1974, when I moved to DOJ Tax Refund 2. Mike was a great lawyer and fantastic person.

Death of Andrew Ascencio, a Tax Division Criminal Section Attorney (7/4/25)

My Google daily searches on the Tax Division picked up that Andrew Ascencio, a Tax Division lawyer, died in a car accident in Australia. Isabel Beer, Department of Justice attorney with Sonoma ties, dies in accident with on vacation in Australia (The Sonoma Index Tribune 7/3/25), here (unfortunately a pay wall). My Google search indicates that he was in the Criminal Section. E.g., Two Men Sentenced for Real Estate and Tax Fraud (DOJ Press Release 5/15/25), here,

Condolences to his family, friends, and colleagues.

A Go Fund Me page, here, has been created to help with the expenses arising from his untimely death.

Trump’s DOJ Eliminates the Tax Division—An Editorial Comment (6/26/25; 6/27/25)

Caveat: This is Jack Townsend’s extended editorial comment on the elimination of DOJ Tax Division. This is an opinion piece. Those who do not care about my opinion might want to focus their attention elsewhere.

I previously wrote on the DOJ budget request that included eliminating the Tax Division. DOJ 2026 Budget Reflects Reorganization Plan to Eliminate Tax Division and Spread Its Functions to Other Components (CIV and CRIM) (DOJ Tax Division Alumni Blog 6/17/25), here.

Trump and his minions (collectively Trump) want to (i) benefit real or perceived friends, (ii) punish real or perceived enemies, and (iii) punish anyone or group or agency that deters him from doing (i) or (ii). Trump’s list of friends (real or perceived) and enemies (real or perceived) can change often and depends upon his whim or grievances of the moment. (For the balance of his posting, I will just refer to friends or enemies, but the reference includes real or perceived.) But I think the throughline is that he really hates his enemies. And he has made clear that he intends to use DOJ to punish his enemies.

The Tax Division is the least political of DOJ Components. (I think even less political than the Solicitor General’s office, particularly after the Bob Jones case where the SG’s office through Larry Wallace, a career attorney in the SG’s office, showed true independence. See Larry Wallace of SG's Office and Footnote Fame Dies (DOJ Tax Division Alumni Blog 2/24/20), here)

Trump could have appointed an Assistant Attorney General for the Tax Division and the next layer of Deputies who likely would bend the knee to Trump. (I’ll call this group Trump tax acolytes.) But Trump tax acolytes would have had some difficulty because, in my experience, they would face resistance in the Tax Division with a tradition of nonpartisanship and overall fairness in tax enforcement. In other words, the likelihood of resistance to Trump acolytes serving Trump (see items (i) and (ii) above) is much greater if the Tax Division remained a separate DOJ Component. And that same likelihood of resistance in the Tax Division as a separate Component would be true whoever holds the political reins of power--Democrat, Republican, Liberal, Conservative, or even a special category for Trump (for which there is a name but not appropriate for publication here; let’s just say it is not a term of endearment.)

DOJ 2026 Budget Reflects Reorganization Plan to Eliminate Tax Division and Spread Its Functions to Other Components (CIV and CRIM) (6/17/25)

The DOJ Fiscal Year 2026 Budget and Performance Summary, dated 6/13/25, here, reflects a reorganization eliminating the Tax Division and moving its functions to the Civil (Tax Branch) and Criminal Divisions. Much of the document is budget-speak that some policy-wonks may want to dig into, but for readers of this blog, the bottom line elimination of the Tax Division and transfer of its functions is the key point. Excerpts relevant to that key point are:

[*10: *20 of pdf]

• Eliminations.

    • Tax Division (TAX). TAX will be eliminated as a standalone component, with its civil enforcement work transferred to CIV and its criminal enforcement work being transferred to CRM. The FY 2025 operating plan allocated TAX’s remaining resources directly to the budgets for CIV and CRM; this is  also reflected in the FY 2026 request. The reorganization provides more oversight to the tax  enforcement function and more effectively distributes resources.

JAT Note: I infer that the "more oversight" may be the key here, because Trump and his minions have previously expressed unhappiness with the Tax Division, the least political DOJ Component, because it took action that Trump and his minions did not like and want more political control over the tax litigation. Of course, more political control of DOJ and its Components which Trump has ramped up may come back to haunt them later when a new administration comes in.

[*65: *77 of pdf]

[*69: *81 of pdf]

General Legal Activities
Criminal Division (CRM)

* * * *

[*70: *82 of pdf]

The Department of Justice has started a reorganization to improve its effectiveness in executing its mission. Included in this reorganization will be the integration of three new groups into the Criminal Division: the criminal portfolios of the Civil Division’s Consumer Protection Branch, the Human Trafficking Prosecution Unit of the Civil Rights Division, and the criminal portfolios of the Tax Division.

      * * *