Trump DOJ Forces Out Top Tax Enforcer in Civil Service Purge (1)

The Justice Department’s chief tax official is resigning rather than accept a forced transfer to a new unit, raising fresh concerns about the Trump administration’s aggressive drive to reshape the agency to fit the president’s agenda.

David Hubbert, a career official whose 40 years at the office included serving as interim chief for the entire Biden administration and part of Donald Trump’s prior term, opted to retire to avoid a reassignment to the sanctuary cities enforcement group, said five people familiar with the decision.

Hubbert’s departure comes on the heels of numerous other veteran career supervisors at the Justice Department receiving orders to choose between quitting or taking reassignments to the upstart immigration team. It creates a vacancy that current and former federal tax enforcers say they worry could ease the administration’s path to overhaul a division with immense authority over civil and criminal tax prosecutions.

Trump’s early weeks in office have been filled with retaliatory actions against perceived government enemies and investigations into individual or business tax filings are considered a lever to at least harass targets, if not take them to court.

“The thing that bothers me the most—tax is the most apolitical of all the divisions,” said Gil Rothenberg, who retired in 2019 as the division’s appellate chief. “It’s a shame that the one person who knew more about the tax division than anyone else was basically forced to resign.”

A DOJ spokesman declined to comment.

A replacement for Hubbert hasn’t been announced. Karen Kelly, another career official, has been coordinating the division’s criminal sections. The DOJ tax division has been without a Senate confirmed leader for the prior two administrations and most of the Obama era.

Shortly after Trump took office, tax division management started instructing career line attorneys to focus on enforcing cases that connect to immigration and transnational criminal organizations, said one of the people, who like most sources spoke on condition of anonymity to divulge private conversations.

Heightened Anxiety

Hubbert’s exit comes several weeks after the tax division’s top criminal official, Stuart Goldberg, retired shortly before Trump took office, and at a time when Rothenberg said many of the section chiefs are considering leaving.

The motive for Hubbert’s transfer is unclear. But his departure intensifies anxiety over tax enforcement.

Taxpayer advocates and professionals have raised taxpayer data privacy concerns over Treasury Department employees on Elon Musk’s federal workforce overhaul team gaining access to the department’s payment systems. Wrongful inspection or disclosure of tax information can result in criminal or civil punishment.

The DOJ Tax Division works closely with the IRS Criminal Investigation division, the enforcement arm of the IRS. IRS-CI will investigate and send prosecution referrals to the Tax Division when there is a tax matter involved.

All other investigations, which can range from human and narcotics trafficking to money-laundering, are referred directly to a US Attorney’s Office. Tax prosecutions at all 93 US attorney’s offices are supposed to get approval from the head of the tax division before bringing criminal charges.

IRS leaders have been rattled to learn of Hubbert’s exit, said a former IRS official. The void is compounding fears that the White House will install a loyalist who’d be willing to sign off on tax charges against political foes or demand other cases be dropped, said multiple former Treasury and DOJ officials.

The division has more than 350 attorneys to enforce the nation’s tax laws through criminal and civil litigation. They prosecute individuals and corporations who evade taxes or commit other crimes, while defending the US in tax refund and civil damages lawsuits.

Now they’ll be without Hubbert, who’d long oversaw the division’s civil matters.

“Dave Hubbert is one of the finest lawyers and people that I know,’' said Kathryn Keneally, former assistant attorney general for the Tax Division. “He did his job with integrity and political neutrality. His departure from the Tax Division is a loss to this country.”

It’s also not clear how and if the Trump administration plans to use DOJ to enforce his policies for the so-called External Revenue Service, a new agency that he plans to create to collect tariffs on imports. That effort may require a legislative fix.

Previously, the slew of rapid changes at DOJ in the administration’s opening weeks hadn’t targeted the tax division, a litigating component Attorney General Pam Bondi didn’t specifically address in her opening-day memos aimed at removing what she called weaponization in DOJ’s career workforce.

“A lot of folks feel very uncomfortable, and everything is uncertain, changes are being implemented extremely quickly,” said Sarah Paul, a former federal prosecutor who oversaw tax cases at the Southern District of New York. “People at the department in general have a sense of whiplash. I think the tax division and the IRS are certainly not immune from that.”

Credit Suisse

Lawyers from the tax division spent years investigating whether Credit Suisse Group AG, now owned by UBS Group AG, breached a 2014 plea deal in which it paid $2.6 billion and admitted helping thousands of Americans evade taxes.

The extent to which Credit Suisse complied with its plea deal took on new focus after a 2023 Senate Finance Committee report said there were “major violations” of its agreement that requires the bank to identify undeclared US accounts to the IRS. In the report, Democratic staff on the committee said the bank failed to fully disclose US assets despite having identified “thousands of previously undeclared accounts” valued at more than $1.3 billion.

While a tax settlement with UBS was expected by the end of former President Joe Biden’s administration, the US has taken no action against the Swiss bank.