IRS Turmoil Deepens After 'Unheard Of' Treasury Interference Triggers Commissioner's Departure

Acting Internal Revenue Service (IRS) commissioner Melanie Krause plans to resign after being left out of a newly signed agreement to share the tax data of undocumented immigrants with the Department of Homeland Security (DHS), according to sources familiar with the situation.

What Happened: The departure marks the third change in agency leadership since President Donald Trump took office. Krause, who will join the administration's deferred resignation program, faced disagreements over staffing cuts, technology overhauls, and the IRS's strategic direction, sources told those at The Washington Post.

"She no longer feels like she's in a position where she can impact the decision-making that's happening," said one individual. "And [she believes] that some of the decisions that are being made now are things the IRS can never recover from."

Treasury Secretary Scott Bessent and Homeland Security Secretary Kristi L. Noem signed the deal Monday, despite IRS lawyers warning it likely violates privacy law. Krause allegedly learned about the move only after the Treasury Department released it to Fox News.

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Monday's agreement grants immigration authorities access to taxpayer information for enforcement purposes. "The government is finally doing what it should have all along," said DHS spokeswoman Tricia McLaughlin. A Treasury Department spokesperson called it a "clear and secure process to support law enforcement's efforts to combat illegal immigration."

Critics argue the arrangement breaches the agency's longstanding tradition of safeguarding immigrant taxpayers' confidentiality. Improper disclosure of tax details is punishable by hefty fines and jail time, with civil remedies available for those harmed.

Krause's predecessors, Doug O'Donnell and Danny Werfel, also left amid tensions, while the administration embarked on mass layoffs and reassignments within the IRS.

Krause's resignation takes effect April 28, following the April 15 filing deadline.

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