The End of an Era: DOJ Dismantles Its Tax Division
In a move sending shockwaves through the tax and legal communities, the Department of Justice has formally announced it will dissolve its long-standing Tax Division, folding its attorneys and budget into the Civil and Criminal Divisions. Officials describe the reorganization as part of a broader “modernization effort,” though many in the field see it as one of the most consequential structural shifts in recent DOJ history.
Formally approved in late September 2025, the reorganization plan includes:
98 employees and $20 million in funding transferred to the Criminal Division
264 employees and $85 million moved to the Civil Division
The FY 2026 DOJ budget removing the Tax Division as a line item, redistributing its prior $106.4 million FY 2025 allocation
The move officially dissolves a division that, for decades, managed the nation’s most complex tax litigation and enforcement efforts in coordination with the IRS, according to the Department of Justice’s FY 2026 Congressional Budget Submission and reporting from Bloomberg Tax.
Growing Unease Within the Profession
Unsurprisingly, the announcement has sparked unease across the tax community.
The restructuring has prompted strong reactions from practitioners and policymakers alike, with critics warning that the change could dilute enforcement focus and erode specialized expertise built over generations. Others have voiced concern about “fragmentation,” noting that dispersing attorneys into broader divisions may lead to inconsistent application of tax policy and case strategy.
In short, while the DOJ may view this as streamlining, many professionals see it as a risky experiment with decades of institutional knowledge on the line.
DOJ’s Reassurance and the Road Ahead
To counter those concerns, DOJ officials have emphasized continuity and reassurance. They maintain that tax enforcement remains a departmental priority, asserting that both the Civil and Criminal Divisions will continue to include tax-focused sections managed by experienced personnel. Oversight structures, they note, are designed to mirror the prior framework, and ongoing cases will proceed without interruption.
Still, the true measure of this restructuring will be how effectively those structures operate within broader departmental mandates—particularly in maintaining consistent attention to tax law and enforcement priorities.
A Defining Test for Federal Tax Enforcement
Looking at the larger picture, the dissolution of the Tax Division represents more than a bureaucratic reshuffle—it’s a symbolic turning point. For nearly a century, the DOJ Tax Division stood as a clear statement of intent: that tax enforcement deserved a specialized, expert-led arm within the federal government.
Now, that principle faces its greatest test. The coming year will reveal whether the DOJ’s reorganization achieves the efficiency it promises—or becomes a case study in the cost of decentralizing expertise.
What This Means for Tax Practitioners: Hold on to your hats
For those who practice in this area, you know how frustrating it can be when the folks on the other side don’t fully grasp the nuances of tax law—or how their position, rather than advancing resolution, turns into an exercise in futility.
If the DOJ’s structural shift results in a wider learning curve for opposing counsel, those challenges could soon become more common. Practitioners may need to adapt not just to new faces, but to a new institutional mindset.
Looking Ahead with Kundra & Associates
As the DOJ charts this new course, one thing remains clear: experience and perspective matter. At Kundra & Associates, our team has spent decades navigating the intersection of tax law, enforcement, and policy—both in times of clarity and chaos.
We’re watching this change closely to understand how it will shape future enforcement priorities, litigation strategies, and taxpayer interactions. Whatever direction the DOJ’s restructuring takes, our commitment to keeping clients informed, protected, and well-positioned remains the same.
Questions about how this restructuring may affect your case or compliance posture? Reach out to our team today for guidance tailored to your situation. We help clients across Maryland, Washington D.C., and Virginia, as well as across the U.S. and abroad.