David D. Stewart: Welcome to the podcast. I'm David Stewart, editor in chief of Tax Notes Today International. This week: dissolving the division.

In June the Justice Department announced that it would be splitting up its stand-alone Tax Division and folding those sections into other parts of the department. The announcement was met with concern from some tax attorneys, but Karen Kelly, then-acting deputy assistant attorney general of the Justice Department's Tax Division, sought to reassure, saying, "Reports of our death have been greatly exaggerated."

Since then, however, Kelly has left the division. Meanwhile, the separation, which was originally expected to happen in August, has yet to occur.

So will the plan be enacted by the end of September when the government's fiscal year ends? And what does the future of criminal tax enforcement look like with all of these anticipated changes?

Tax Notes senior legal reporter Nathan Richman recently sat down with Karen Kelly to discuss her time at the Tax Division and what lies ahead for both her and the department. Nate joins me now to talk more about their discussion. Nate, welcome back to the podcast.

Nathan J. Richman: As always, thanks for having me.

David D. Stewart: Could you give us some background on Karen?

Nathan J. Richman: Karen spent about 30 years at the Tax Division, starting as a line prosecutor and working her way up through the ranks, and most recently was the acting assistant attorney general.

David D. Stewart: And what all did you talk about?

Nathan J. Richman: Well, we talked both about her journey and the state of the Tax Division, and on what days it will exist and what days it will not exist.

David D. Stewart: All right. Let's go to that interview.

Nathan J. Richman: Welcome to the podcast.

Karen E. Kelly: Hello. Thank you.

Nathan J. Richman: So you just left the Tax Division after nearly 30 years. What did the Tax Division do?

Karen E. Kelly: OK, well, good question. I did just leave. My last day was August 7, after nearly 30 years. The Tax Division still exists, although the reorganization memo was signed last week, so short-term. The Tax Division is a component within the Department of Justice and it is the locus of all of the tax prosecutions, civil and criminal enforcement investigations, tax actions — throughout the entire United States. So all matters pertaining to federal tax go through the Tax Division at the Department of Justice, and [the division] interacts with all of the United States citizens and all of the U.S. attorney's offices, the 93 U.S. attorney's offices throughout the United States. The Tax Division interacts with the district courts throughout the United States, with the U.S. attorney's offices in the tax enforcement arena. They work very closely with the IRS and they work with the Department of Justice.

Nathan J. Richman: Well, we'll talk a little bit more about the recent changes in a bit, but first can you give us a little bit of your back story?

Karen E. Kelly: So I came to the Tax Division from a prosecutor's office in the Commonwealth of Virginia. I was an assistant commonwealth attorney, and in the course of prosecuting criminal cases in the Commonwealth of Virginia, I had a couple of former IRS special agents who had retired down to Richmond and were with the Department of Taxation. They were criminal enforcement in the Department of Taxation of Virginia. They would come into the Fairfax County Commonwealth Attorney's Office where I worked at the time, and all the other more senior prosecutors knew to shut their doors when the revenuers were coming. And I was one day just a little too slow out of my chair, and these lovely senior investigators came into my office. They were actually carrying donuts. And they sat down in my chair, and they introduced me to criminal tax cases and asked me to handle their cases that they had brought that were venued in Fairfax County, which I did.

I started prosecuting state tax crimes. And we developed a relationship, and at some point, they came in with donuts and an advertisement for a trial attorney at the Department of Justice Tax Division and encouraged me to apply for that. And although I was really reluctant to do that — it sounded so, so boring to me — I did ultimately, with their firm persuasion, send an application in, and then when I went over to the Department of Justice to interview with the folks and learn about the job, I realized, "Wow, this is an amazing job."

Nathan J. Richman: So what roles have you held before you left at the Tax Division?

Karen E. Kelly: OK, sure. So when I started, I was a trial attorney and I was in the Northern criminal enforcement section, which that region enforces the tax laws from Washington, D.C., up to Maine over to Michigan. I was responsible for grand jury investigations and prosecutions throughout that region. Also as a trial attorney, I was responsible for conducting reviews of cases that were referred to us from IRS Criminal Investigation because all the criminal cases throughout the United States that pertain to tax enforcement, they all are generated through IRS Criminal Investigation. They come to the Tax Division for review, and the trial attorneys, the assistant chiefs, and the chief review those cases for consistency, uniformity, and to make sure that it's a real case, that there's probable cause, and that the prosecutor who receives that case can prove the case beyond a reasonable doubt in a criminal court.

So I was involved in investigations and prosecutions throughout the Northern criminal enforcement section of the United States, working in U.S. attorney's offices and bringing cases in the district courts. All the trial attorneys at the Tax Division have a review function, an important review function, where we receive every case that IRS Criminal Investigation generates and we review them thoroughly to make sure that they're uniform and consistent so that the taxpayer in Portland, Maine, is treated the same as the taxpayer in Portland, Oregon; that there's an appropriate tax loss sufficient to make it a federal case; and to make sure that there's evidence beyond reasonable doubt that it's a winnable case.

We want to bring strong cases to the juries throughout the country to show if you are going to flaunt the tax laws, violate the tax laws intentionally, engage in an intentional violation of a known legal duty, we're going to prosecute you. And in doing that, the goal is to send a strong deterrent message to all of the taxpayers throughout the United States, because if you don't pay your taxes, there are consequences. There's very serious civil consequences, but if you're intentionally violating your known legal duty and not paying your fair share as a result of that misconduct, we're going to prosecute you and we're going to put you in jail. We're going to take away your liberty. This isn't something that you can just pay your way out of. And so that's one of the goals of the Tax Division.

I was then promoted to assistant chief in the Northern criminal enforcement section. As the assistant chief, my litigation responsibilities stayed the same. I had an obligation and a joy of mentoring younger attorneys and sort of teaching them the ropes: This is how we do grand jury investigations. This is how you would interview a witness. This is how we prepare for trial. This is what a trial looks like.

But also as assistant chief, I had a different review function. So the trial attorney generates what we call a prosecution memo, and that's the compilation of their expertise and review of the submission from IRS-CI. They look at the exhibits, they assess the evidence, they write a prosecution memo for the ultimate recipient, which is the AUSA [assistant U.S. attorney] in the U.S. attorney's office, and that's sort of a blueprint of how to successfully prosecute this criminal case, assuming they authorize it for prosecution. The assistant chief receives that package. We review the prosecution memo generated by the trial attorney. Then we also review the package from IRS-CI, which is also accompanied by a memo from their CT counsel, criminal tax counsel. And then we sort of generate what would be what I call the 25,000-elevation summary of the case: This is a great return preparer case; the tax loss is $1.5 million. So anyway, so that was my job in Northern as assistant chief.

That continued through 2019, and then in 2019, I was appointed as chief of the Southern criminal enforcement section, which was really fun because it was all new connections. And that was really interesting, really fun. As chief, of course, my responsibilities quadrupled. I was responsible for, of course, the 30, plus or minus, trial attorneys, including the senior litigation counsel and deputy chiefs, and then we have paralegals and support staff and you sort of have to manage down and manage up to the deputy assistant attorney general and the assistant attorney general. So that position pulled me away from actual litigation in the courtroom. I was heavily involved in the supervision of the litigation in the courtroom, so I was very happy as chief of Southern criminal enforcement section, and we brought a lot of really great cases.

And then in January with the transition, Stuart Goldberg, who was the deputy assistant attorney general [DAAG] for criminal matters, retired, and I was appointed to take his position. And that became effective, I want to say January 21, 2025. Very quick. And so then as acting deputy assistant attorney general for criminal matters, I then supervised Northern, Southern, and Western, all of the criminal tax matters that were at the Department of Justice.

It was an OK comfortable job because I had been doing it many, many years and was highly familiar with our work product and our attorneys and our cases and IRS-CI and the special agents and all of our processes. And I was very well-connected with IRS-CI and those special agents and the executive folks in CI. Even as chief, I was very focused on working hand in glove with IRS-CI to make sure that the machinery moves smoothly and that we were always on the same page, kind of walking in lockstep. So as DAAG, that was part of my responsibilities.

Nathan J. Richman: And so that was great for how many weeks?

Karen E. Kelly: Was it a full week? Maybe seven days? It was pretty brief. I want to say that it was still January when Dave Hubbard, who had been the acting assistant attorney general [AAG] of the Tax Division for at least four years —  but David stepped into the breach a hundred percent of the time every time. So he was experienced in doing that and was really the king of tax enforcement and administration. Excellent leader, excellent manager, outstanding in every way, really just a great person too.

And pretty quickly into the administration, initially the administration notified all forms of nonpolitical deputy assistant attorney generals and above that they were being reassigned or relocated. Some were to different working groups that had not previously existed before that were newly formed. And initially in that first week when that was happening, David Hubbard was not part of that group.

Then, I want to say within two weeks of that, he got a notification that he was being reassigned to the [Sanctuary Cities Enforcement Working Group], I think is where they were sending him. In any event, he was not interested in going to the Sanctuary City working group, and he had been with Tax Division for a substantial amount of years — I want to say probably 30 years. So he decided it was probably best to retire and look for some new opportunities, which is what he did, which was great for him.

Nathan J. Richman: At the same time, Francesca Ugolini, the deputy assistant attorney general for tax appeals, did she go through the same thing?

Karen E. Kelly: Francesca was the chief of the civil appellate section, and after David was reassigned, she decided that she was going to, I believe, retire under that DOJ-promoted DRP, that they called the "drip" program, is what I understand.

Nathan J. Richman: This is the deferred resignation program.

Karen E. Kelly: Yes, yeah. So Francesca was the chief of the Appellate unit at DOJ on the civil side.

Nathan J. Richman: And that led to —

Karen E. Kelly: In response to David retiring and leaving, a lot of people then started looking at that DOJ DRP a little bit more seriously because they were distressed. It was upsetting. I was the next person in the org chart. So that did lead to me stepping in as the acting assistant attorney general, and Angelo Frattarelli, chief of the Southern civil section, came in to assist on the civil side. My experience at that point had been exclusively on the criminal side, and so Angelo was a huge help, and continues to be now the person who's sort of steering that ship as it travels forward into its separation.

Nathan J. Richman: And this brings us to August. You have since left the Tax Division.

Karen E. Kelly: Yeah.

Nathan J. Richman: Tell us why you decided to leave. And why now?

Karen E. Kelly: Yeah, so I did leave the Tax Division on August 7, and that was not something I was planning on doing, truthfully. The two DRPs that they had at DOJ were alarming and the number of people who were departing was alarming, and it wasn't something that I was considering.

There was also a voluntary early retirement program that was implemented at the Tax Division. Again, the focus of the department was to try to create a lot of attrition and eliminate spaces, eliminate people. So that was also an option in the Tax Division that was going to be available through the end of August for people who were eligible. A certain age and a certain number of years, you become eligible for this VERA, which is an early retirement. Those were options that were on the table, but they weren't things that really interested me as a career prosecutor.

However, I'm going to say it was March, when a memo came out from Todd Blanche. It was a reorganization memo and it was styled as a request for feedback generally. And it proposed the elimination and reassignment of 11 different components within the Department of Justice as a realignment program and a way to eliminate extra fat, so to speak. In that memo, along with the many other proposals, was the elimination of the Tax Division and reassigning the attorneys out into the U.S. attorney's offices throughout the United States, and keeping a small cadre of tax managers at main Justice — they would be housed in the executive office of the United States attorney, to implement the tax manual.

Nathan J. Richman: That did not draw a lot of approval from the private bar. How was it received in the Tax Division?

Karen E. Kelly: Yeah, you can imagine, right? So the proposal was to take these trial attorneys out of Washington, D.C., and move them into the 94 U.S. attorney's offices throughout the United States. So that in and of itself is traumatic. You've got to pack up and move to Nebraska, which is great if you love Nebraska, but maybe it wasn't on your 2025 plan.

And of course the Tax Division attorneys are tax professionals, and they're interested in the uniform enforcement of the tax laws. And so of course there was the professional concern regarding the degradation of tax enforcement throughout the United States. If you're going to be in a U.S. attorney's office, when in Rome, you're going to do as the Romans do. And if their priorities in that U.S. attorney's office are going to be drugs or perhaps immigration, and always guns, then you're going to also work those cases in addition to tax cases.

One of the things that's great about the Tax Division is having all these experts in the same silo, if you will, allows for a lot of collaboration, and no issue is new because somebody within that group, within the 300 attorneys, is going to have dealt with that issue in their career or know someone who's dealt with that issue or know who to call in IRS-CI or IRS to get the subject matter expertise that may be necessary in some of those very complicated civil tax and appellate issues that came up and come up. So there was concern about the degradation of tax enforcement, in addition to the personal concern of having to pack up your family, and maybe your spouse would have to quit their job while you get relocated somewhere in the United States. And how does that even happen? Is it by lottery? Do you spin a wheel to decide where you're going to go geographically? Do you raise your hand and volunteer? A lot of stress.

Full dispersal, blessedly, did not happen. And as you said, the tax bar was very alarmed by it. They did not like the idea of denigrating the tax enforcement of the United States after 90 years of the Tax Division standing strong.

The Tax Division, we sort of collaborated like, "What can we do here? What's the best move?" We proposed, well, how about we think about staying in the Department of Justice and going into other components? So the civil section of the Tax Division go into the Civil Division, and the criminal section of the Tax Division go into the Criminal Division. Those are two preexisting, very large divisions within the Department of Justice, and that's what Todd Blanche and his team agreed to and started to work towards implementing. And that kind of unfolded in, say, May, June of 2025.

So when that started to become a reality, the Tax Division isn't going to exist anymore, I started to think, well, it was my professional career, so I was like, what to do? And so I started to just kind of cogitate about that. Was I ready to retire and garden and spend my day walking dogs? And I felt like, "No, that isn't something I wanted to do." So I started to think about, what do I want to do? And I really strongly felt like I still wanted to be in the tax space and still be part of the tax world. And as June started to pass by, I started to realize like, OK, I need to start thinking about this for real. And so I started to think about the future for me, and I didn't want to be in the Criminal Division. I just didn't think that was a good place for me as I was moving along in my career.

Nathan J. Richman: Any thoughts on the idea — and I've seen some other commentators criticize this — that by eliminating the Tax Division and some of these other Justice Department components, there is some sort of budgetary savings. The government becomes leaner somehow because there are fewer components?

Karen E. Kelly: Well, certainly when you look at an org chart, it will look leaner. There are 11 components that won't be there. So you're going to look leaner. You've eliminated an assistant attorney general. You've eliminated four deputy assistant attorney generals. You've eliminated at least two senior executive service positions, and then you've eliminated all of the support that is part of a front office. The front office is a group of people, but it's also a big protection because they're the final say on the uniform enforcement of tax law throughout the United States, right? It's an important protection and barrier for citizens who are on the receiving end of tax enforcement and tax policy. So that's eliminated, so you save a few dollars there.

You eliminate in the plan, with regards to Tax Division, you eliminate the office of management. So that's the travel, the experts, the training. In theory, they're all going to be going into other components within the Department of Justice. So they're still there, hopefully. So that's no savings. It's taking very skilled, highly specific, talented people and moving them into new areas that aren't going to necessarily match their skill sets.

And then you have the tax attorneys, the trial attorneys, they're going into Civil and Criminal, so they become part of that budget. So they're still there. You'll still have to support the trials throughout the United States. There's still the traveling component where we go out into the different U.S. attorney's offices for our function and goal. It's a little bit more of wallpaper, right? A veneer of streamlining than actual streamlining with regards to the tax division specifically.

Nathan J. Richman: Do you have any concern that civil litigators might be less fully focused on tax, that that might have a budget hit to the government based on longer, or potentially less favorable to the government, outcomes of stuff like refund suits, that are brought by taxpayers not within the control of the Justice Department?

Karen E. Kelly: Right, sure. That litigation is still going to continue, and it's probably going to be a substantial uptick in that litigation if in fact the IRS, through its attrition programs, continues to be slow in responding to taxpayers, right? Because their remedy is to go file a suit in Tax Court or in the district courts. So yes, I think that the civil tax litigators are going to be stretched thin.

They're still going to be very busy because taxpayers are going to continue to file their suits, and there's a lot going on in the Civil Division of the Department of Justice. There's a lot of litigation coming out of that shop. They're in the paper pretty much every day with the litigation that they're involved in, and it's not exclusively tax litigation at all. And so with regards to the DOJ honors program, they have a lot of openings that they're trying to hire folks for because there's so much going on with regards to the immigration enforcement. So hopefully the tax litigation section will be insulated from that and they'll be able to focus on tax litigation and IRS issues and the uniform enforcement of taxes throughout the United States.

But when your resources are so sparse, you may be inclined to pull a tax attorney over and say, "Hey, I need you to go and handle this immigration matter. I need you to handle this [section] 6103(i)(2) matter in the D.C. district court. I need you to do this." Because they're now in another component, they're in the Civil Division, they have a new AAG, and his priorities certainly are going to be more vast and broad than the AAG of the Tax Division and what were the priorities of the AAG of the Tax Division.

Nathan J. Richman: What is the attempted end product, beyond some of these eliminations, about what should the tax litigation by Justice Department look like once this move has been completed?

Karen E. Kelly: Well, ideally, right, the Civil Division will have a unit and it should be the tax unit, and I think it's the tax litigation unit. That unit will have a deputy assistant attorney general responsible for it, and that will also include the civil appellate team. They'll all be housed in the Civil Division of the Department of Justice and working on, ideally, exclusively tax matters.

Criminal side, the three criminal sections, so what we were referring to earlier, the Northern criminal enforcement section, the Southern criminal enforcement section, and the Western criminal enforcement section, along with their small appellate shop, will be moved to the Criminal Division, and they're going to be called the tax section. And within the tax section, they will still have, at least initially, their geographical separation. And in the Criminal Division, there will be one chief and one deputy chief who will oversee the tax sections in the Criminal Division. And that one chief would then report up to a deputy assistant attorney general. Initially it's a career deputy assistant attorney general, Jennifer Hodge, and then from the deputy assistant attorney general, it would report up to the AAG of the Criminal Division.

Nathan J. Richman: And so as of September 24, what is the status of those changes?

Karen E. Kelly: So as of September 24, the reorganization memo, which was supposed to be signed in July for the August 7 transition, is now signed. It was signed last week by the AG. That means that the elimination of the Tax Division is now moving forward, and the criminal divisions and the civil divisions are now coming back to get that process in place. They had cooled off the end of July when they realized this memo wasn't going to get signed in a timely fashion, and now they're putting timelines back in place to implement this change.

Nathan J. Richman: Do you have the current time frame for when this is supposed to be done? Is it supposed to be done within a week?

Karen E. Kelly: It can't be done within a week. It's a big process as you can imagine. I don't have the timeline. I don't think that the timeline has been rolled out as of today. It involves a lot of work. It involves changing the regs. It involves changing the U.S. attorney's manual, the tax chapters within the U.S. attorney's manual, changing out computers and appointing people into different positions. There may be some relocation for some of the staff. It involves thoughts about internal tax programs that keep track of and maintain the information with regards to all of the tax matters referred from IRS.

But because the reorganization memo was now signed, it is going to go forward. So there was that little bit of period in August, right up until about last Tuesday, where there was the question mark over people's heads like, "Well, maybe this isn't going to happen."

Nathan J. Richman: Has any of this affected the Justice Department tax attorneys' relationship with the IRS over the last few months?

Karen E. Kelly: I don't think it's affected the relationship with the IRS, this reorganization. I think that the chaos and the lack of consistent leadership and some of the general stresses of what's unfolding in the enforcement area has caused stress, not between the relationship so much as just general stress among the people, the people who do the job.

It's been a stressful — certainly when I was there, I found it to be a stressful nine months for people. A lot of uncertainty, a lot of different direction and misdirection of what's going to unfold, a lot of threats. In the first month or two, there were a lot of threats coming through email to attorneys and staff at the Department of Justice and throughout the federal government, just general threats like, "OK, you don't work hard. You stink. We don't like you, federal employees. Get a real job. What are you doing here? Hit the road."

Stuff that was really demoralizing if you're on the receiving end of that, and that has nothing to do with the Tax Division, but it has everything to do with the federal workforce receiving this information, this constant drip of criticism. I mean, these are people who are highly motivated on behalf of the United States and on behalf of the citizens of the United States. And so they would go to work thinking like, "I'm doing a great job. I am helping my country. I feel good about what I do." And then all of a sudden the narrative changed and it was like, "You suck and you don't work hard, and guess what? The American people, they don't like you." And that was really a sea change for the people of the Department of Justice and the federal government; no one felt that way about themselves until they started being told like, "You suck." And then you were like, "Oh, geez, that's the first time anyone's ever said that to me about the hard work I've been doing for the past 30 years. I need to rethink this."

Nathan J. Richman: How about any of the specific chaos from the IRS hitting the Tax Division? However many commissioners we've had this year, for example?

Karen E. Kelly: So we work closely with the IRS, right? So when they're hurting, we're hurting. When they're sad, we're sad. That's how the Tax Division feels because we work hand in glove with them. They are the source of our cases, and we are always attuned to what their needs are. And when they're struggling, then we're struggling. That just bleeds over, 100 percent. And if they're demoralized because their supervisors have all quit or their supervisors don't exist and someone's in an acting role only and they feel at a loss of what to do next, well then we certainly feel that at the Tax Division, right. We're sort of hand in glove with the IRS.

Nathan J. Richman: You mentioned section 6103; that's the protection for confidential tax information held by the IRS. What sorts of changes around 6103 do you think the change to tax litigation at Justice Department will require?

Karen E. Kelly: Well, 6103, it's 26 U.S.C. 6103, and it's the provision in the United States Code that protects tax and tax information and permits it to be released and shared in very specific circumstances only. And that statute's important because it gives taxpayers confidence that the information they provide to the IRS is protected and not going to be released frivolously and for no reason.

From the criminal perspective, tax information is protected within the Tax Division. So we have specific computer programs on our computers to make sure that no one can come rifling through your computer to get other people's tax information or see what you're working on. We have protections in place to make sure that tax information is treated consistent with the statute, and U.S. attorney's offices are informed and trained on 6103, and when you're working a tax case, how to protect your tax information and when that tax matter is no longer relevant or isn't charged, how to destroy the tax information.

The Department of Justice takes statutes very seriously. We follow the law and the law requires us to protect tax information. And so that's something that will have to be foremost in folks' mind as they move into the Civil and Criminal divisions, and they have to account for that in their IT and in their processes, and who can have access to the tax information and who can be part of a tax team and who can use the tax information. That complicates the elimination of the Tax Division.

When we're one big silo, the 6103 information, the tax information, comes to the Tax Division, and it's within that silo that we use that information for the very specific reasons that the statute permits. But when you're in a silo that is as vast and expansive as say the Civil Division or the Criminal Division, I think it's even more important that you get those protections in place. And so that's something I'm sure that they're working on as they try to implement this transition.

Nathan J. Richman: What do you see in the future for criminal tax enforcement as of, say, October of 2026?

Karen E. Kelly: October of 2026? Well, I hope that the criminal enforcement will continue as it has been, bringing robust criminal tax cases that have strong evidence of intentional violations of known legal duty, heartland cases, what we call legal source income cases, where the tax loss is substantial. It's worth the resources of the U.S. attorney's offices in the tax unit, or tax section rather, to prosecute, to bring strong sentences, to continue sending a strong message of deterrence to the taxpayers in the United States that, "Hey, we've got your back. You're not a sucker for paying your fair share."

I'm hoping that there'll be an upside to being in the Criminal Division. I'm hoping that that will allow for appropriate collaboration. There's so many fraud cases, healthcare fraud and all types of cases that are brought in the Criminal Division where tax can be a strong complement to that indictment, and I think that that would be a good benefit, a good use of collaborative resources. So I'm hoping that we'll see that.

Nathan J. Richman: Well, let's move on now to your moving on. So you've been at Kostelanetz, your destination after leaving the Justice Department Tax Division, for a few weeks now. How's it going so far?

Karen E. Kelly: It's great. I was nervous about it because it seemed like a really big adjustment, although I was really certain about going to Kostelanetz just because they are the preeminent tax law firm in the United States, so I knew it was going to be a great fit. I just didn't know how great of a fit it was going to be. I'm constantly amazed at how outstanding those attorneys are, and the folks in that office, they're incredible.

They've also been really supportive. I'm primarily a criminal tax attorney, and nevertheless, they've been super supportive as I try to branch out and learn the different avenues that they have available within their office and also build my own criminal tax defense business basically. There couldn't be a better place for me with regards to the fit, and they couldn't be more supportive, which has been really great. I wasn't sure what to expect. It's far exceeded my expectations, so that's great. But it's early days. I'm still learning a lot, but I am enjoying it so far.

Nathan J. Richman: What has been the biggest change about being on client side so far?

Karen E. Kelly: So it's interesting. That's a really great question. So from the prosecution side, I was very focused all the time on the intention of violation of known legal duties. Let's talk about their overt act. Let's talk about their affirmative act of evasion. Let's talk about the tax loss. Let's talk about relevant conduct. What else can we pull in for tax loss? I was very focused on the big picture of the case and the success of the case and what we have as evidence.

On the client side, you meet a human, a person who's just like you and me, who has a family and a career, and who's done their best for the most part in their business or however it is that they've accumulated their wealth. They are like a person who feels like they've been struck by lightning on a golf course. They're stunned and they're shocked, and they're rightfully frightened of the strength and power of the federal government when they focus on you because it is a huge muscle. It is a lot of heft.

I'm surprised as I see the human side of how difficult it is to be on the receiving end of the focus of the United States government in a federal tax investigation or prosecution. It is really a lot for the individual, and it's our job to try to support them and help them in every way, as well as walk them through the labyrinth that is what may unfold.

Nathan J. Richman: Is there any particular thing you're looking forward to while continuing your career on the private practice side?

Karen E. Kelly: I am looking forward to representing clients in court as the defense attorney. That's going to be a huge change for me. I'm so used to walking into court and saying, "It's Karen Kelly on behalf of the United States." And I'm looking forward to coming into court and saying, "Your Honor, it's Karen Kelly and I'm here on behalf of my client, John Doe," and sort of standing in between the United States government and my client. I think that's going to be amazing challenge and an interesting challenge and a big change for me. I'm like switching to the other side of my brain so vigorously, right? No Alzheimer's for me, clearing out the plaque, but I'm looking forward to that. I really think that's going to be an exciting opportunity for me.

Nathan J. Richman: Have you had any thoughts about the possibility of eventually returning to the government?

Karen E. Kelly: No. I do have my eye on the government, of course, right, as we all do, and just watching things as the drumbeat, the steady drumbeat, moves forward with their agenda. So we'll see.

Nathan J. Richman: Thanks so much for joining us. It has been an interesting conversation.

Karen E. Kelly: It's been my pleasure to be here. Thank you so much.

David D. Stewart: That's it for this week. You can find me online @TaxStew, that's S-T-E-W, and be sure to follow @TaxNotes for all things tax. If you have any comments, questions, or suggestions for a future episode, you can email us at podcast@taxanalysts.org. And as always, if you like what we're doing here, please leave a rating or review wherever you download this podcast. We'll be back next week with another episode of Tax Notes Talk.

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