Karen Kelly was quoted in a recent Tax Notes article about the Justice Department’s new National Fraud Enforcement Division and the announcement that they are moving the former criminal tax section trial attorneys from the DOJ’s now defunct Tax Division into this new Division.
The Tax Division was eliminated last year, and its civil and criminal divisions were moved into the existing Civil Division and Criminal Division. Acting Attorney General Todd Blanche announced in an April 7 memo that the department created a new division, the National Fraud Enforcement Division, “to zealously investigate and prosecute those who steal or fraudulently misuse taxpayer dollars.” and DOJ intends to transfer the the former Tax Division’s criminal section from the Criminal Division where they have been assigned for less than six months, into this new Division.
Karen, who served in many key Tax Division roles, including as acting head of the division, was quoted in the article saying that the new National Fraud Enforcement Division’s mission appeared to be the same as that of the Tax Division’s. Karen noted that Blanche’s memo repeatedly referred to “taxpayer-funded programs” as a focus of the division, which could apply to “all tax fraud” and should mean that tax will continue to be part of their focus.
Karen told Tax Notes that the new head of the division would benefit from having a tax expert as a top deputy in the division, because “that person will need to articulate tax rules, explain why ‘obstacles’ are really ‘protections,’ and stand up to law enforcement and the administration, she said.”
She noted that she is interested to see whether the new division will focus on “low-hanging fruit” tax cases, like those involving the earned income tax credit, or if it will pursue the sorts of sophisticated tax schemes that take years of work to investigate and prosecute.
Read the full article entitled “Justice Department Makes More Tax Enforcement Changes” here.
About Karen
The former acting head of the Justice Department’s Tax Division, Karen joined Kostelanetz after more than 30 years of federal and state trial practice, including prosecuting tax and white-collar crime. Her practice focuses on representing clients adverse to the government, including in criminal matters, and state and federal civil tax controversies.
