The acting commissioner of the Internal Revenue Service (IRS), Doug O'Donnell, is expected to announce his retirement on Tuesday, according to three sources familiar with the situation. This announcement marks the latest departure from the agency following increased pressures from Elon Musk’s team for access to sensitive data and significant layoffs.
O'Donnell, who has dedicated nearly 40 years to the IRS, assumed leadership last month after the previous commissioner stepped down at the start of President Trump's term. Melanie Krause, the current chief operating officer, is anticipated to become the new acting leader after O'Donnell's departure on Friday, according to sources who requested anonymity.
The IRS is navigating a turbulent period as Doug O'Donnell steps down. The agency has been a longstanding political target for Republicans, with President Trump initiating deep layoffs, dismissing over 6,700 employees last week. Elon Musk has proposed abolishing the IRS and has placed a member of his so-called Department of Government Efficiency in the agency, suggesting more personnel may follow.
Prior to these layoffs, the IRS employed roughly 100,000 staff members, tasked with collecting over $5 trillion in annual revenue. Former President Joseph R. Biden Jr. invested billions to modernize the agency's outdated technology and strengthen its ability to pursue tax evaders, particularly among large corporations and the wealthy.
Experts in taxation warn that President Trump's rapid reversal of these modernization efforts could potentially increase the deficit by facilitating tax avoidance. The IRS is currently amidst its most demanding period, the annual filing season, when millions of Americans file their tax returns. Democrats have expressed concerns that the recent layoffs might lead to delays and errors for taxpayers awaiting refunds. The Treasury Department has not commented on these developments.
Breaking from the tradition of treating the IRS leadership as a nonpartisan role, President Trump has nominated Billy Long, a former Republican congressman, as the commissioner. Long has previously advocated for the abolition of the IRS and promoted a controversial tax credit flagged by the agency for fraud potential. The Senate has yet to consider Long’s nomination.
Even before President Trump's tenure and the consequent job cuts, Doug O'Donnell had been contemplating retirement, according to two informed sources. Last week, IRS officials resisted efforts by Elon Musk’s team to gain extensive access to the agency's data, which contains sensitive information about American earnings and families.
