Bloomberg Law, DOJ Tax’s Dissolution Forces a High-Stakes Reset for IRS and DOJ:

With the Department of Justice’s Tax Division now formally dissolved, US tax enforcement is entering a new era. Given the Division’s central role in maintaining the delicate balance between voluntary compliance and effective enforcement—a balance that underpins the entire tax system—a post-mortem is essential to keep voluntary compliance effective in this new culture.

The partnership between the IRS and DOJ Tax was the cornerstone of the US voluntary compliance system. The synergistic relationship between IRS and DOJ Tax was like a delicate ecosystem—highly susceptible to change. With the considerable changes to both the IRS and DOJ in 2025, it is crucial to understand the importance of this synergistic relationship; what made it so successful; and what effect reduced staffing, limited resources, and institutional realignment could have on the US tax system as a whole.

At the very least, understanding what the Tax Division accomplished, and why it worked, is critical to ensuring that the newly created “Tax Litigation Branch” within the Civil Division and “tax section” in the Criminal Division carry forward its most effective strengths. …

The relationship between the IRS and the Department of Justice is one of the most crucial components of the US tax system. As the government continues to confront increasingly complex forms of tax evasion—ranging from offshore bank accounts to cryptocurrency transactions—the importance of collaboration between these two agencies has never been greater. When well-executed, that relationship can truly deliver extraordinary results.

However, like any other symbiotic relationships, the effectiveness of their operation is a delicate balance. External factors such as staff reductions, realignment of chains of command, and modification of operating directives must be considered to maintain that delicate balance. A shift in the relationship, even minor, can have drastic effects on the overall tax system. So much of the success in this relationship is due to the experience and relationships of the individuals on both sides. Knowing who to call, when to call, and what the response will most likely end up being, is a big reason why this relationship has worked so well. This level of communication requires experienced individuals on both sides of this new relationship.

The partnership between the IRS and DOJ Tax was the linchpin in keeping current voluntary compliance practices a reality and ensuring individuals and organizations who attempt to evade taxes are held accountable for their actions. As we move forward into the new, post-Tax Division landscape, the hope is that the structures requiring the close coordination between the new DOJ and IRS teams are allowed to continue so new relationships are forged.

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