Next IRS Chief Counsel Will Benefit By Making Staff A Priority

The role of IRS chief counsel isn’t a simple one. When a new person takes the helm, it brings a renewed focus on the responsibilities of the position.

The nomination of Jim Gadwood is before the US Senate, and whether we are talking about him or someone else in the future, the IRS chief counsel should be open to accepting input from key personnel, and use that input to make clear decisions and navigate appropriate solutions for guidance and tax controversy. As a steward of the office, the new chief counsel also must ensure a strong pipeline of talent.

The chief counsel serves several important constituencies: the IRS, Treasury Department, and the taxpaying public (which in turn includes individuals and entities). But what can the chief counsel do to advance the goal of providing the “legal guidance and interpretive advice” as spelled out in the job description?

The IRS and Treasury are tasked with offering formal guidance, which brings together all three of the constituencies mentioned above. The priority guidance plan and the regulatory plan reflect that implementing the 2025 tax law, deregulation, and burden reduction are top priorities. While Treasury is generally responsible for policy decisions, the chief counsel’s office generally drafts the guidance and advises on available options, keeping in mind both the statute and other relevant authorities.

Other authorities include court decisions that implicate substantive or procedural issues, as well as regulations and sub-regulatory guidance (including Notices, Revenue Rulings, and Revenue Procedures) that reflect prior technical and policy decisions.

In this vein, the chief counsel’s direct reports must keep him informed. That includes associate and deputy associate chief counsels as well as division counsels and their respective personnel. Because the chief counsel may well not have been with the organization for their entire career, they may not be deeply familiar with prior or recent positions taken by the government in a given substantive area that would inform a current course of action.

Furthermore, there is a vast set of statutory provisions, final and proposed regulations, and subregulatory guidance. While the chief counsel may have deep experience in one or more substantive areas, there is simply too much information for one person to have everything at their fingertips. So it is valuable to have specialists with, in some cases, decades of experience on a given topic to brief the chief counsel and get them up to speed quickly.

There are many talented and experienced attorneys and other professionals who can help the chief counsel make solid recommendations to Treasury and the commissioner’s office. Receiving and considering input from these valued internal advisers helps prevent institutional risk that would otherwise arise from pursuing decisions that are inconsistent with prior practice or other technical areas, or that result in undue expenditures of time and resources.

In some cases, the chief counsel must offer a solution when there is a difference of opinion within the office or between personnel and the Treasury or the commissioner’s office — or make tough calls where there isn’t a clear technical result. This kind of situation can arise where the statute and related guidance don’t squarely address a particular factual scenario, in some cases because facts have evolved or emerged since guidance was issued.

As another example, the statute may delegate regulatory authority but not provide specifics concerning how it is to be implemented. Decisiveness is important in arriving at and presenting an appropriate course of action, given what may be an aggressive timeline to get necessary guidance out to taxpayers.

Another important function of the chief counsel is advising on tax controversy matters. These include examinations as well as litigation, and can involve individual matters or cases, or groups or types of matters or cases. This also requires accepting input and turning it into solutions. Attorneys in the Department of Justice — not just IRS agents and attorneys — can benefit from the chief counsel’s input. The advice should rely on existing statutory, administrative, and judicial guidance, and further the goal of getting an appropriate technical answer.

Presumably a new chief counsel will review what types of examination and litigation matters demand the most attention from attorneys in the office and recommend appropriate ways to resolve them efficiently.

Finally, the chief counsel has significant management responsibilities. It’s helpful to think of the office like a large law firm. It refers to itself in similar terms, stating on its job application website: “We are the largest tax firm in the country with approximately 1,700 attorneys.”

This means it’s critical that the organization attract and retain talent to have sufficient staffing to fulfill its core missions. The chief counsel plays an important role here, in part by assessing personnel needs and recommending staffing quantities and mix, and by promoting a collaborative and robust environment in which employees can build successful and rewarding careers.

Setting forth, through words and actions, a strong focus on the organization’s mission and on developing technical skills helps energize the professionals on a day-to-day basis. Word-of-mouth is important too, as the tax law community is cohesive enough that people considering a government position will hear of positive experiences.

Given the size of the organization that reports to the chief counsel as well as the need for its component divisions and individuals to work together well, positive morale is important. Acknowledging that the chief counsel is a very busy person, presence (both in the office and on virtual meetings) helps considerably in demonstrating a team environment. In-office fun activities, whether tied to major holiday seasons or not, also help employees build camaraderie.

We shouldn’t ignore the role of technology. Modernization and enhancement are necessary for all large organizations, and the IRS Office of Chief Counsel is no exception. Where a new technology solution has been approved and funded, the chief counsel should make sure all divisions feel empowered to participate actively in the implementation process, including providing constructive feedback.

Originally published in Bloomberg Tax

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