Note: The Author gratefully acknowledges the contributions of NTU Foundation Vice President of Research Demian Brady and Senior Policy Manager Debbie Jennings to this article.
Today, the Senate Finance Committee held a hearing on four executive branch nominees, including James R. Gadwood for Chief Counsel of the Internal Revenue Service (IRS). In this important role, the Chief Counsel serves as the legal advisor to the IRS Commissioner on interpreting, administering, and enforcing tax laws. Mr. Gadwood has most recently served as Vice Chair of the Tax Department at the major law firm of Miller & Chevalier.
Given that virtually no substantive tax administration policy questions were directed to Mr. Gadwood during the hearing, the issues raised below could serve as Questions for the Record to clarify how he would address them as Chief Counsel.
If the following questions look familiar to readers of ntu.org, it’s because many of them are similar to those we asked in advance of the confirmation hearing for the last nominee for Chief Counsel, Donald Korb, in September of 2025. (The Administration abruptly withdrew Korb’s nomination last November, which may be one reason why the current nominee’s turn before the Senate Finance Committee was given such a short shrift).
Nonetheless, responses to the following would serve as important guides to the views of one among just two IRS leaders (the other being the IRS Commissioner) who are subject to a congressional approval process.
1. What role will clarity and timeliness of guidance have in tax law enforcement under a Chief Counsel Gadwood? The Chief Counsel works with other IRS divisions to compile the forms, memoranda, opinions, and other official IRS documents intended to help taxpayers comply with the laws—and “clarity and timeliness” haven’t always been at the top of the IRS’s collective mind.
2. How will a Chief Counsel Gadwood work with the Commissioner and Treasury Department to repeal anti-taxpayer rulemakings from the previous Administration? Many of these rules were issued at the last minute and touch on issues including partnership basis adjustments, captive insurance arrangements for small businesses, and supervisory approval for penalties. Mr. Gadwood’s stated experience with partnership examinations at Miller & Chevalier could be put to good use for taxpayers, depending upon his answers here.
3. How will a Chief Counsel Gadwood rein in peculiar IRS enforcement strategies? Under the previous Administration, the IRS took an aggressive stance in application of the Economic Substance Doctrine (ESD). Recent court cases including Patel v. Commissioner of Internal Revenue and Liberty Global Inc. v. United States demonstrate a troubling trend toward overly broad application of the principle. How will a Chief Counsel Gadwood work to rebuild trust with the practitioner community, trust that has been eroded by poor IRS customer service and murky IRS rules aimed at disciplining tax professionals?
4. How will a Chief Counsel Gadwood address the massive backlog of cases in Tax Court where the IRS is taking largely procedural positions? A report from NTU’s research arm released in April 2026 reviewing nearly 800 conservation easement cases showed that the IRS took an extreme zero valuation position 93% of the time, and asserted misstatement penalties 99% of the time. In an attempt to unclog court dockets burdened by these cases, Acting Chief Counsel Kenneth Kies crafted a settlement offer this year that did not appear to provide sufficiently attractive new terms. Added to small business captive insurance issues, which the IRS has treated with similar suspicion, over 2,500 cases sit on court dockets, some of them for years. As the IRS’s top lawyer, a Chief Counsel Gadwood could instruct the attorneys on his team to pursue strategies that would thin this caseload to allow more types of taxpayer issues to receive a fair and speedy hearing. His task could be made less onerous with the IRS’s announcement last month of an “Office of Conservation Easements” that “will centralize technical expertise and coordinate policy, enforcement, and case-resolution strategy across the IRS and with the Office of Chief Counsel.”
5. What new tools will a Chief Counsel Gadwood use to improve law enforcement in a collaborative manner that respects taxpayer rights? Just two recommendations from NTU and NTU Foundation are the use of regulatory sandboxes (which encourage regulators and regulated entities to experiment in optimizing rules) and settlement initiatives (which allow the IRS to reach an accord on a common legal dispute with a class of taxpayers under audit or in Tax Court). The former would help to reduce front-end enforcement and compliance headaches for both the government and taxpayers; the latter would ease the pain on the back-end.
6. Would a Chief Counsel Gadwood support expanded use of Alternative Dispute Resolution (ADR) to keep more cases out of court and give taxpayers an affordable way to be heard when they disagree with the IRS? The IRS recently began efforts to revitalize the languishing ADR program through a new dedicated program office and several pilot programs designed to expand ADR options after revelations that taxpayer use of the ADR process has decreased by 65% since 2013. While these recent developments seem promising, it is essential that the IRS encourage use of ADR to prevent lengthy disputes that cause tax uncertainty.
7. Will a Chief Counsel Gadwood respect the taxpayer’s right to appeal by allowing the Independent Office of Appeals to function as intended? In 2022, the IRS issued a rulemaking proposing to create or memorialize nearly two dozen exceptions to a taxpayer’s right to appeal (which NTU Foundation called into question via comments to the IRS). Even prior to that time, the presence of Chief Counsel staff at appeals hearings and allegations of ex parte communications between IRS enforcement lawyers and appeals officers were troubling enough to result in remedial legislation being proposed. According to his Miller and Chevalier biography, Mr. Gadwood “has represented taxpayers before the IRS Independent Office of Appeals in the non-docketed, docketed, and early referral contexts.” This experience could prove invaluable to a Chief Counsel Gadwood in restoring the expansive congressional intent for appeals expressed in 1998 and 2019 legislation that NTU supported. That process could begin by issuing new guidance to IRS attorneys about respecting the appeals office’s procedures.
8. What would a Chief Counsel Gadwood do, within the limits of his authority, to help implement recommendations from advisory panels such as the Electronic Tax Administration Advisory Committee (ETAAC) or the National Taxpayer Advocate? For example, ETAAC’s recommendations to develop more plain-language guidance for taxpayers, human-centered design in services, and additional tools to combat tax scams all touch upon the responsibilities and interests of the Chief Counsel’s office.
9. How will a Chief Counsel Gadwood incorporate artificial intelligence (AI) into his office’s operations without compromising quality of service or respect for taxpayer rights? Scholars have already noted the dangers of “symplexity” with regard to IRS use of AI chat bots, where the use of plain language to explain complex tax law sometimes misconstrues the actual law. While taxpayers welcome innovation at the IRS, new tools must be implemented transparently and with safeguards for taxpayers who communicate with AI tools. To frame this discussion, members of Congress could ask Mr. Gadwood for his views on the Government Accountability Office’s efforts to identify and reform the AI use case inventory for IRS enforcement tools (which NTU’s research arm reported on earlier this year).
10. How will a Chief Counsel Gadwood incorporate the Taxpayer Bill of Rights into all guidance and enforcement decisions, ensuring that due process, clarity, and fairness are central to the IRS legal actions and determinations? The Taxpayer Bill of Rights, codified into statute in 2015, has all too often been an afterthought with the IRS, as the National Taxpayer Advocate has documented.
11. How will a Chief Counsel Gadwood work with Treasury’s Office of Tax Policy to ensure completion of projects included in the annual Priority Guidance Plan, as well as publishing regular updates to the Plan which had been standard practice until last year?
12. How would a Chief Counsel Gadwood ensure respectful relations with the IRS National Taxpayer Advocate’s (NTA) Office, the creation and strengthening of which NTU has championed for many years. As an example, the U.S. House of Representatives passed, by unanimous consent, the bipartisan Taxpayer Advocate Participation Act, which would allow the NTA to serve as an expert amicus curiae (“friend of the court”) in federal tax-related court cases. What are Mr. Gadwood’s views on this legislation?
13. Very importantly, how would a Chief Counsel Gadwood cooperate in implementing the Taxpayer Assistance and Service (TAS) Act, which NTU has called “the most consequential tax administration bill in decades”? The Senate Finance Committee recently marked up and passed the TAS Act by a 26-1 vote, while the House has been enacting portions of the legislation by wide bipartisan margins for most of this year. Yet, there are key additions and modifications to elements of the legislative package, including enhanced appeal rights for taxpayers, and approval safeguards for statutory notices of deficiency in audits, that Congress can still make. Many of these vital changes will directly affect the Chief Counsel’s office, and Mr. Gadwood’s leadership will be instrumental in their success.
These are just some of the urgent matters taxpayers hoped to learn more about from Chief Counsel Nominee Gadwood, today and in the weeks to come, but did not. Congress should insist on specific, detailed views now to get a clearer picture of where the IRS is headed in the future.