IRS acting head resigns over illegal immigrant data sharing agreement reached with DHS: report

Krause has served as the acting agency commissioner for barely six weeks, as the third person to hold the job at the tax collection agency this year. Two current and one former IRS employees told CNN that Krause informed her staff on Tuesday that she was resigning.

One source said the data-sharing agreement was one factor in Krause’s decision to leave, and that the final agreement was different than the last draft Krause was involved in. The source said that other reasons Krause wanted to leave included the exodus of other senior executive career employees over the past few days as well as the direction the IRS is heading in.

Former Commissioner Danny Werfel, who was nominated by then-President Joe Biden, resigned in January after President Donald Trump moved to replace him. He was replaced by longtime IRS executive Doug O’Donnell, who retired barely a month later. Trump has selected former Rep. Billy Long (R-MO) to be IRS commissioner, but the Senate Finance Committee has not yet held a hearing on his nomination.

A Treasury Department spokesperson told USA Today, "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. We believe these goals are critical to a more efficient government and safer country. We wish Melanie well on her next endeavor."

The IRS has agreed to share taxpayer data with immigration authorities under an agreement finalized this week between the Treasury Department and the Department of Homeland Security as part of the Trump administration’s efforts to combat illegal immigration.

The White House is also working to downsize the agency’s staffing levels, while the Department of Government Efficiency is exploring ways to upgrade the agency’s technological capabilities.

Several other top IRS officials, including the agency’s chief financial, privacy, and risk officers, are also reportedly planning to resign.

The IRS is in the middle of processing tens of millions of tax returns, as filing season is set to end April 15, and it remains to be seen if the turmoil at the agency has affected tax return or refund processing.