Dismantling the Justice Department tax division will cost us billions

The Department of Justice is poised to make a grave mistake: dismantling its tax division, America’s frontline defense against ultra-wealthy tax cheats.

As sophisticated tax fraud surges, gutting this division would severely weaken enforcement and deterrence, inviting more evasion by the ultra-wealthy. It would send a message to those at the top: complex evasion schemes will go unpunished.

Tax enforcement in the U.S. is already on life support, with tax evasion costing U.S. taxpayers approximately $447 billion each year, a figure that dwarfs popular claims of government waste. Yet fraud prosecutions haven’t just declined over the last decade; they’ve collapsed, dropping nearly 50 percent between 2014 and 2023. Shockingly few big-time tax evaders face justice, with only 363 individuals convicted of criminal tax fraud in 2023. As one IRS investigator candidly told us, “There’s never been a better time to commit tax fraud.” Without a Department of Justice tax division, that is bound to get much worse.

The stakes could not be clearer. Consider a few recent successes from the tax division’s record. In the Anderson Ark case, the division unraveled an offshore evasion scheme, recovering nearly $100 million for taxpayers and shutting down a fraud operation that victimized thousands of Americans. It also secured a stunning $2.6 billion plea deal from Credit Suisse for its role in helping wealthy Americans evade taxes.

In the ongoing case involving the late billionaire Robert Brockman, prosecutors are pursuing more than $1.4 billion in taxes and penalties from alleged offshore income, making it the largest individual tax fraud indictment in U.S. history.

These cases highlight the tax division’s extraordinary value. Its specialized prosecutors consistently recover far more than the division’s modest $106 million budget, making it one of the federal government’s smartest investments. The Credit Suisse settlement alone recovered more than the division spent in two decades. This is exactly the kind of return taxpayers deserve.

Without a centralized tax division, complex cases like these will likely go unseen and unprosecuted. For example, cases like Anderson Ark, which span the country and extend overseas are likely to be ignored by regional U.S. Attorneys’ offices, which are focused on local priorities. The biggest, most complex cases require concentrated expertise, along with the resources and institutional attention span that regional offices lack. The Brockman case alone required five expert prosecutors over seven years.

Distributing elite tax litigation specialists to regional offices, where they’ll be assigned cases outside their expertise, isn’t just inefficient. It’s demoralizing. Some of the tax division’s top prosecutors have already resigned in anticipation of the restructuring. The inevitable result is emboldened tax evaders and billions in lost revenue and penalties. It also sends a clear message to taxpayers: The Department of Justice is no longer cultivating the deep expertise needed to prosecute complex tax fraud. If your scheme is sophisticated enough, you will likely get away with it. If you are ever indicted, you will fight it, knowing the Department of Justice lacks the focus and firepower to win.

Our tax system fundamentally depends on voluntary compliance and public trust. Weak enforcement threatens both. The top 1 percent already evade taxes at three times the rate of taxpayers in the bottom half of the income scale. The automated matching systems the IRS relies on aren’t designed to catch billionaires; they disproportionately target middle-income earners with straightforward returns. Catching sophisticated tax evaders requires equally sophisticated enforcement, precisely what a robust, centralized tax division provides. Without it, wealthy tax cheats will increasingly view evasion as a low-risk gamble, leaving billions unpaid and forcing ordinary Americans to cover the difference.

Congress and Department of Justice leadership must recognize what is at stake and reverse course. The tax division is not just another bureaucratic unit. It is America’s strongest defense against sophisticated tax fraud and financial crime. The division deserves reinforcement, not dismantling. This isn’t a political issue, but one of fundamental fairness. Preserving and strengthening the tax division will uphold justice, reinforce public trust and save taxpayers billions.

Corey Smith, a 33-year Department of Justice tax division veteran, led the Brockman criminal prosecution as senior counsel. Jens Heycke is the author of “Death, Taxes, and Turduckens: Unraveling History’s Biggest Tax Heist and the Broken System That Enabled It.”