Jay Nanavati, along with Joseph A. Rillotta of Meadows Collier and Carolyn Schenck of Caplin & Drysdale, co-wrote an article for Tax Notes examining whether the Justice Department’s decision to dismantle the Tax Division was lawful and what impact it is having on both tax administration and compliance.
The Justice Department issued a regulation in December 2025 transferring the Tax Division's functions to the department’s existing Civil and Criminal Divisions. Since then, questions have arisen about how this change affects charging decisions, the consistency of enforcement priorities, taxpayers' ability to negotiate with the government, and the equitable administration of justice.
The article contends that the department may have violated the Administrative Procedure Act (APA), which governs the federal rulemaking process. Executive branch agencies may make changes without following the rules of the APA and public comment if the changes primarily have an “intra-agency impact” and do not substantially change the rights and interests of regulated parties.
The article outlines how the DOJ potentially violated the APA in eliminating the Tax Division, and argues that the reorganization was not “merely technical” and has broad implications for taxpayers.
The trio argues that the fragmentation of enforcement caused by the reorganization “might lead to inconsistent tax enforcement and to an erosion of confidence in the tax system that may ultimately cost the U.S. Treasury billions of dollars. Purported efficiency in tax enforcement gained at the cost of equity and predictability is a net loss for American jurisprudence and, ironically, for the American taxpayer.”
The full article can be found at Tax Notes. Jay and his co-authors also created a video for Tax Notes on this topic, which you can view on their LinkedIn feed.
About Jay
Jay is a criminal tax defense attorney and a fellow of both the American College of Trial Lawyers and the American College of Tax Counsel. He represents individuals and entities facing investigations and prosecutions by the IRS, the FBI, state investigative agencies, U.S. Attorney’s offices, and the Department of Justice Tax Division. Jay has defended clients against federal investigations and charges throughout the country.