In a significant development at the Internal Revenue Service (IRS), Acting Commissioner Melanie Krause announced her departure from the agency on Tuesday. This decision comes in the wake of considerable internal chaos and the recent exodus of several senior IRS officials. According to sources comprising two current IRS employees and one former employee, Krause's resignation aligns with her acceptance of the agency's deferred resignation offer.
Krause's resignation follows the IRS's recent agreement with the Department of Homeland Security (DHS), finalized on Monday, to share sensitive taxpayer data with federal immigration authorities. This agreement aims to assist the Trump administration in locating and deporting undocumented immigrants, a move that has sparked widespread controversy. One source familiar with the situation indicated that the final version of the agreement differed significantly from the last draft Krause reviewed. Alarmingly, Krause reportedly learned about the details of the finalized agreement through media reports.
Beyond the contentious data-sharing agreement, sources suggest that Krause's decision to resign was influenced by her concerns regarding the overall direction of the agency. The IRS has recently witnessed an unprecedented level of leadership turnover, with three leaders departing this year alone. Danny Werfel, the Biden-appointed and Senate-confirmed IRS commissioner, resigned on Inauguration Day, followed by Doug O’Donnell, who retired shortly after refusing to sign the data-sharing agreement with DHS in February. Krause had only been with the IRS for three-and-a-half years before her resignation.
A spokesperson for the Treasury Department acknowledged Krause's leadership during a tumultuous period for the IRS. "Melanie Krause has been leading the IRS through a time of extraordinary change," the spokesperson stated. They emphasized the agency's focus on IT modernization and efforts to reorganize in a manner that better serves taxpayers. They also mentioned the importance of breaking down data silos that have historically hindered the identification of waste, fraud, and abuse, reiterating the administration's commitment to a more efficient government.
Multiple senior career officials at the IRS expressed their refusal to sign the controversial data-sharing agreement with DHS due to serious concerns about its legality. This situation prompted Treasury Secretary Scott Bessent to sign the "memorandum of understanding" with DHS instead. Reports indicate that the dispute surrounding the data-sharing deal has led to multiple resignations among senior IRS officials, further destabilizing the agency.
In light of these developments, there has been growing pressure on Krause and other IRS officials from the Treasury and other administration members, particularly regarding planned changes within the agency. A primary focus for the administration includes reallocating IRS criminal investigators to support DHS in immigration-related investigations. Discussions have also hinted at the potential restructuring of the IRS criminal investigations division, possibly moving it under the Treasury, highlighting the ongoing changes within the agency.
This story continues to evolve, and updates will be provided as new information emerges. CNN’s Evan Perez contributed to this report.
