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| OVERVIEW |
The mission of the Tax Division is to handle or supervise civil and criminal matters that arise under the internal revenue laws. The Tax Division strives to ensure consistent application and uniform enforcement of the internal revenue code in order to promote compliance with the tax laws and maintain confidence in the integrity of the tax system.
Tax Division attorneys work closely with the Internal Revenue Service and United States Attorneys to develop tax administration policies; handle civil trial and appellate litigation in federal and state courts; pursue federal grand jury investigations; and handle criminal prosecutions and appeals.
Significant recent Tax Division initiatives include the following:
On June 10, 1933, President Franklin D. Roosevelt issued an executive order consolidating within the Department of Justice the control of all federal tax litigation. In October 1933, Attorney General Homer Cummings created the Tax Division, effective as of January 1, 1934, and charged it with primary responsibility for supervising all federal litigation involving internal revenue.
An earlier proposal to consolidate federal tax enforcement was made in 1829, when President Andrew Jackson considered assigning the Attorney General to handle all "treasury litigation." Senator Daniel Webster successfully opposed the plan and offered an alternative. Under the Webster Act, which controlled tax enforcement for more than a century, several government agencies shared responsibility for tax litigation. As the complexity of the tax laws increased after World War I, however, the system of divided responsibility for tax litigation grew increasingly inefficient.
Since 1934, the Tax Division has been charged with maintaining uniformity by handling most litigation arising under the internal revenue laws. The Division's authority is codified at 28 C.F.R. Â§ 0.70. This centralized control of tax litigation better enables the government to take consistent positions on tax issues and thereby promote the fair and uniform enforcement of the tax laws.FUNCTIONS
The Tax Division represents the United States and its officers in most civil and criminal litigation that concerns or relates to the internal revenue laws. Tax Division attorneys seek to secure correct, uniform and fair interpretations of the internal revenue laws in federal district and appellate courts and to ensure that uniform standards are applied in criminal tax prosecutions. Tax Division attorneys also work with the Internal Revenue Service, United States Attorneys and other government agencies on policy and legislative proposals to enhance tax administration.
An Assistant Attorney General, who is appointed by the President and confirmed by the Senate, runs the Tax Division. Four Deputy Assistant Attorneys General help to manage the Division. The Tax Division employs more than 350 attorneys in fourteen civil, criminal and appellate sections. All Tax Division sections are based in Washington, D.C., except for the Southwestern Civil Trial Section, which is located in Dallas, Texas.
Tax Division attorneys conducting civil litigation are charged with promoting public compliance with the internal revenue laws by ensuring strict and even-handed enforcement. The work of the Tax Division's Civil Trial Sections covers a broad spectrum of litigation in United States District courts, United States Bankruptcy Courts, and state courts. The civil trial work performed by the Division is handled by six regional trial sections.
The Tax Division handles most affirmative and defensive civil litigation arising under the internal revenue laws in federal district and bankruptcy courts and in state courts. The work of the civil trial attorney includes defending the United States in tax refund and civil damages suits, representing IRS and Justice Department employees in lawsuits for damages allegedly caused in the performance of their official duties, and defending the Secretary of the Treasury, the Commissioner of Internal Revenue, and other officials against lawsuits testing the validity of federal tax regulations and rulings. Civil trial attorneys also bring suits to collect unpaid assessments, to foreclose federal tax liens or to determine the priority of such liens, to obtain judgments against delinquent taxpayers, to enforce IRS administrative summonses, and to establish tax claims in bankruptcy, receivership and probate proceedings.
The Civil Trial Sections also represent other federal departments and agencies in cases involving the immunity of the Federal Government from state and local taxation.
These cases present a variety of legal issues involving federal tax law, bankruptcy law, constitutional law, commercial law and state property law, as well as a panoply of evidentiary, procedural, and jurisdictional issues.
The Tax Division's civil trial attorneys are responsible for every phase of their assigned cases from initial pleadings through discovery and trial, including briefing and arguing motions and conducting jury and non-jury trials.
The monetary impact of the Tax Division's affirmative litigation efforts is far-reaching in scope. During Fiscal Year 2000, the Division directly collected nearly $120 million in revenue for the United States Treasury. In addition to the money collected directly as a result of the Division's cases, the judicial rulings in the cases handled by the Tax Division impact other cases and serve to deter potential violators of the tax laws. Individual cases therefore often have tremendous significance beyond the amount directly at stake in the case.COURT OF FEDERAL CLAIMS SECTION
The Court of Federal Claims Section defends all tax suits filed in the United States Court of Federal Claims.
The Appellate Section is responsible for handling appeals in all civil tax cases.
Appellate Section attorneys prepare briefs and present oral arguments in the United States Courts of Appeals and the various state appellate courts, and assist the Office of the Solicitor General in preparing briefs in the United States Supreme Court. Appellate attorneys also review adverse Tax Court, Court of Federal Claims, state trial court and United States District Court decisions and prepare recommendations to the Solicitor General about whether to file appeals.
When the United States is not a party in cases that may affect the interests of the United States on tax-related issues, Appellate Section attorneys prepare amicus curiae briefs setting forth the Government's position on those issues.
The Tax Division has established an impressive record in the appellate courts. During Fiscal Year 2000, the United States won - in whole or in part - 94% of taxpayer appeals in civil tax cases. Furthermore, the United States won 66% of the appellate cases it brought challenging adverse lower court decisions in such cases.
The Office of Review evaluates settlement offers in light of litigating potential and policy considerations, furnishes advice and assistance to the trial sections in complex cases, takes final action on settlements within its authority, and advises the Assistant Attorney General on settlements that require final action at a higher level. The Office of Review also assists in resolving disagreements between the litigating sections and the IRS, so that the positions of the Division and the IRS remain consistent.
The Tax Division is responsible for handling or supervising most federal criminal tax prosecutions. Attorneys assigned to the Tax Division's three regional Criminal Enforcement Sections investigate and prosecute individuals and corporations that attempt to evade taxes, willfully fail to file returns, submit false tax forms, and otherwise attempt to defraud taxpayers. The Criminal Enforcement Sections are staffed with prosecutors who are particularly skilled at investigating, prosecuting and evaluating complex financial crime cases. Prosecutors conduct criminal tax investigations with the assistance of the IRS Criminal Investigation Division and the Treasury Inspector General for Tax Administration.
The federal criminal tax enforcement program preserves the integrity of our self-assessment tax system through the vigorous enforcement of the internal revenue laws. Vigorous enforcement punishes violators, deters future violations, and reassures honest taxpayers that they will not bear an undue share of the federal tax burden.
Attorneys in the Northern, Southern and Western Criminal Enforcement Sections evaluate requests by the Internal Revenue Service or United States Attorneys to initiate grand jury investigations or prosecutions of tax crimes. Some criminal tax grand jury investigations and prosecutions are actively handled by Tax Division prosecutors. Many cases are delegated to Assistant U.S. Attorneys for grand jury investigation and prosecution. Because of their unique resources and specialized expertise, Tax Division attorneys frequently join with Assistant U.S. Attorneys in prosecuting tax cases. In other cases, they provide legal advice.
Many tax prosecutions involve criminal violations of the internal revenue code by people who earned income from legal sources but who committed crimes to evade payment of taxes. Other cases involve tax violations related to other criminal activity, including corporate fraud, financial institution fraud, health care fraud, public corruption, organized crime and narcotics trafficking.
Tax Division prosecutors pursue international crime, including the illegal use of offshore trusts and foreign bank accounts to evade taxes. They also play an important role in the nationwide Organized Crime and Drug Enforcement Task Force (OCDETF) program and the war on terrorism.
Attorneys assigned to the Criminal Appeals and Tax Enforcement Policy Section (CATEPS) handle appeals in criminal tax cases tried by Criminal Enforcement Section attorneys and supervise appeals in cases prosecuted by U.S. Attorneys' Offices. CATEPS attorneys also review adverse decisions of United States District Courts and United States Courts of Appeals in all criminal tax cases and prepare recommendations to the Solicitor General about whether to appeal or seek other review. CATEPS plays an important role in promoting the fair, correct and uniform enforcement of criminal tax laws. In addition its criminal appellate responsibilities, CATEPS helps to formulate criminal tax enforcement policy. Working with the IRS and the U.S. Attorneys' Offices, CATEPS attorneys develop policies that govern the investigation and prosecution of tax crimes.
CATEPS attorneys also assist in gathering evidence from overseas and work to expand international cooperation in tax enforcement, particularly with governments of nations with financial institutions that are used to conceal taxable income and governments that seek assistance in establishing their own tax enforcement and collection programs.
The Office of Legislation and Policy works on legislative and policy initiatives to facilitate the Division's litigation and promote efficient tax administration.
The Tax Division's Office of Management and Administration oversees budget and personnel matters and maintains a sophisticated computer network. The computer system provides word processing, docket management, electronic communications, internet access and computerized legal research tools. The Division also uses computers to provide automated litigation support for large, document-intensive cases.
The Tax Division conducts an extensive training program for its new attorneys. This program is designed to provide training in practical courtroom skills as well as in relevant substantive areas of the law. Practicing attorneys and academicians serve as instructors in this program. In addition, the Tax Division regularly presents sessions focusing on discovery techniques, evidentiary problems, courtroom skills, the art of advocacy, effective cross-examination, substantive tax issues, and other areas germane to the Division's work. These classes are held in the Tax Division's Wynette J. Hewett Training Center, which is equipped with audiovisual and videotape facilities.
The Division also actively participates in the Attorney General's Advocacy Institute. Tax Division attorneys and staffers benefit from televised, videotaped and computerized training provided by the Justice Department's Office of Legal Education and attend live training seminars at the Justice Department's National Advocacy Center in Columbia, South Carolina.
Assistant Attorney General
Eileen J. O'Connor
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