Acting IRS Commissioner Resigns After Data-Sharing Agreement Reached With ICE

Acting Internal Revenue Service Commissioner Melanie Krause informed her staff Tuesday she is leaving the agency amid internal chaos and the exodus of several senior IRS officials, according to two current IRS employees and one former IRS employee. Krause’s decision to accept the agency’s deferred resignation offer comes on the heels of the IRS and Department of Homeland Security finalizing an agreement Monday to provide sensitive taxpayer data to federal immigration authorities to help the Trump administration locate and deport undocumented immigrants, CNN reports. The controversial data sharing agreement between the agencies was one factor that played a role in Krause’s decision to leave, according to one source with knowledge of the situation. The source said that the last draft of the agreement that Krause had been involved with, and had reviewed, was different than the final agreement. Krause learned about the details of the final agreement from the news, the source said.

There were other reasons Krause wanted to leave, the source said, including the direction the agency was going in and the exodus of multiple senior executive career employees within the last few days. The IRS has seen three leaders depart this year — an unprecedented level of upheaval for the beleaguered tax-collecting agency. The Biden-appointed and Senate-confirmed IRS commissioner, Danny Werfel, resigned on Inauguration Day. The acting commissioner who succeeded him, Doug O’Donnell, refused to sign a data-sharing agreement with DHS in February. Shortly after that, he retired. Krause then took over in an acting capacity. She had only been at the IRS for three-and-a-half years before her decision to leave. Multiple senior career IRS officials refused to sign the data-sharing agreement with DHS because of grave concerns about its legality, according to a source with direct knowledge of the matter. This is why Treasury Secretary Scott Bessent ultimately ended up being the person who signed the “memorandum of understanding” with DHS, that source said.