Note, some of my statistics reported below have been corrected on 5/6/25 11:00am.
I have sprinkled some of my blog entries with war stories from my
time with DOJ Tax (1969-1977, with just over 4 years in Appellate and just over
3 years in a refund trial section, called Refund 2, which covered roughly
Virginia through Texas. In the Refund 2 trial section, I handled cases in South
Carolina, the Northern and Middle Districts of Georgia, Eastern District of North Carolina, and 2
life insurance company cases in Florida and Texas (I forget which districts, but I think Middle District of Florida and Northern District of Texas (because Vester Hughes was opposing counsel) although those cases were not
resolved by the time I left DOJ Tax. Today, inspired by the article I quote
below, I offer some more war stories through statistics.
The inspiration is a recent article, Stephen K. Cooper, DOJ
Tax Chief Touts Winning Court Record On Appeals, 2025 Law360 16-164
(1/16/25) [free link unavailable]. The article covers a talk by Francesca
Ugolini, the acting chief of the DOJ Tax Division—there has been no
Presidentially appointed and Senate-approved Assistant Attorney General for
some time. The article includes the following:
The U.S.
Department of Justice's Tax Division won an overwhelming majority of appeals in
tax cases last year by prioritizing strong legal arguments in disputes that had
the potential to significantly affect federal tax administration, the head of
the division said Thursday.
Francesca Ugolini, chief of the DOJ's Tax
Division, said in the last fiscal year, the government prevailed in 94% of
appeals brought by taxpayers and had an unexpected success rate of 75% for its
own appeals.
"We
usually do prevail in over 90% of the taxpayer appeals," Ugolini said at
the D.C. Bar Tax Conference, held in Washington, D.C., and online. Regarding
the government's appeals, "it's usually over 50%," she said.
"It's
not always as high as 75%, but we have some pretty, pretty good success in the
appellate courts," she said.
Ugolini
attributed the higher-than-normal success rate to the division's thorough
review process that was used to decide whether to appeal a case the government
has lost at the trial level. This includes assessing the strength of the legal
arguments, the potential impact on federal tax administration and whether the
case presents the best vehicle to address the issue.
"We
don't like to lose on appeal, so we're looking at the strength of the
case," she said. "That includes … the strength of our legal argument,
what the standard of review is [and] what the precedent is in the circuit.
"We're
more likely to appeal cases that involve legal questions, because those are
reviewed de novo on appeal, whereas adverse fact findings are reviewed for
clear error, and they're really hard to reverse on appeal."
The
administrative implications of the case are also important to the DOJ in its
decision-making process, Ugolini said.
"We're
also looking at what is the broader effect on the federal tax system," she
said. "Is this issue important to the IRS administratively? What's the
impact on federal tax administration? And then we're also looking at, is this
the best case to present the issue?"