WASHINGTON, DC (Aug. 11, 2025) — Kostelanetz LLP is pleased to announce that Karen Kelly, the immediate past head of the Department of Justice’s Tax Division, is joining the firm as a partner in our Washington, D.C., office. Karen’s practice will focus on state and federal civil tax controversies, criminal tax and white collar investigations, internal investigations, representing legal and tax professionals and their firms in license and regulatory matters, and complex civil and criminal litigation.
After almost 30 years with the Department of Justice, Karen most recently served as the Acting Assistant Attorney General and delegated component head of the Tax Division, where she supervised more than 300 attorneys conducting civil and criminal investigations and prosecutions. Karen’s career as a prosecutor includes serving as a Trial Attorney in the Northern Criminal Enforcement Section, where she conducted sophisticated grand jury investigations and prosecuted criminal tax trials in federal district courts. She served as Assistant Chief of the Tax Division’s Northern Criminal Enforcement Section for more than a decade before she was promoted to the Chief of the Southern Criminal Enforcement Section. As Chief, Karen supervised all aspects of criminal tax investigation and litigation in 16 states and territories, including authorizing investigations and prosecution referrals from IRS Criminal Investigation. She supervised a team of more than two dozen trial attorneys, and her successes include the first successful criminal prosecution of multiple professionals involved in the creation and promotion of a syndicated conservation easement tax shelter.
“I am excited to join Kostelanetz’s amazing team. Kostelanetz is well known for their deep bench of subject matter experts, and strong, thorough, and ethical advocacy on behalf of their clients,” Karen said. “The firm has attracted former DOJ attorneys throughout much of its history, particularly since opening its D.C. office in 2017. This is a natural fit for me as I bring my decades of insights and experience to private practice.”
Karen also currently serves as a member of the Virginia State Bar Attorney Disciplinary Committee, where she reviews attorney disciplinary complaints and investigations and conducts disciplinary hearings. She plans to retain this role while at Kostelanetz.
“I have known and respected Karen for more than 10 years, and I am excited to have her on my side of the table as we advocate for our clients in front of the IRS and Department of Justice,” said partner Caroline Ciraolo, who also served as head of DOJ’s Tax Division. “Her extensive experience, astute legal judgment, investigative and trial skills, and expansive knowledge of tax practice and procedure make her a perfect fit for Kostelanetz. Our clients are very fortunate to have her on their team.”
“Karen brings more than 30 years of state and federal litigation experience to Kostelanetz, and we are thrilled to have her join our ranks,” said partner Bryan Skarlatos. “She brings a wealth of knowledge about current and past tax enforcement trends and priorities and a well-honed legal mind to our tax and white collar defense practices.”
Karen has been a frequent speaker on tax enforcement issues during her career, appearing at ABA-sponsored conferences and other tax bar events. She also trained dozens of attorneys, law enforcement agents, and IRS personnel in the United States and overseas, including as a regular presenter at the Justice Department’s training center in South Carolina and at IRS training events. For example, Karen worked with IRS-Criminal Investigators to present U.S. criminal tax law and procedure to Serbian law enforcement and prosecutors, and with the IRS and Treasury to provide training for professionals within the Barbados Revenue Authority.
For her outstanding litigation and supervisory service during her time at the Justice Department, Karen was the recipient of the Attorney General’s Award for Outstanding Service for her contributions to the Jack Abramoff task force. She was also honored with the Attorney General’s Distinguished Service Award. She was also recognized with the Department of Justice Executive Office Director’s Award. She was recognized for her work by the IRS as the recipient of the IRS Criminal Investigation Chief’s Award. Throughout her career, Karen received more than a dozen Tax Division Outstanding Attorney Awards and was recognized with DOJ’s Outstanding Mentor Award, among other honors.
Prior to her career at the U.S. Department of Justice, Karen prosecuted state crime as an Assistant Commonwealth’s Attorney in Fairfax County, Virginia.
Karen received her law degree, cum laude, from Syracuse University College of Law and her bachelor’s from the College of the Holy Cross.
For nearly 80 years, Kostelanetz LLP has built a global reputation as a law firm of choice for clients facing high-stakes controversies, negotiations with government agencies, and complex domestic and international tax planning decisions. Our attorneys have extensive experience in tax controversy, tax fraud defense, white-collar criminal defense, securities enforcement defense, trust and estate planning, transactional tax planning, and government investigations. We are regularly called upon to handle the most challenging and sensitive matters and internal investigations. Important parts of the firm’s practice also include commercial litigation and government procurement and contracting.
