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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.
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.
“Melanie Krause has been leading the IRS through a time of extraordinary change. As we focus on IT modernization and re-organize the agency to better serve the taxpayer, we are also in the midst of breaking down data silos that for too long have stood in the way of identifying waste, fraud, and abuse and bringing criminals to justice,” a Treasury Department spokesperson said in a statement. “We believe these goals are critical to a more efficient government and safer country. We wish Melanie well on her next endeavor.”
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.
As CNN reported earlier Tuesday, the dispute over the data-sharing deal triggered multiple resignations among senior IRS officials.
Krause and other officials have faced pressure in recent weeks from Treasury and other administration officials amid broader discussions of planned changes at the IRS, according to a person familiar with the talks.
A top priority for the administration is reassigning IRS criminal investigators to do immigration-related investigations to support DHS in border enforcement work. The discussions have also included the possibility of moving the IRS criminal investigations agency to be part of the Treasury, the person familiar with the matter said.
This story has been updated with additional reporting.
CNN’s Evan Perez contributed to this report.
