The acting head of the Internal Revenue Service, Melanie Krause, has announced plans to resign after opposing a new agreement that allows the sharing of taxpayer information with federal immigration authorities.
Krause will be the third IRS leader to leave the agency this year. The IRS has been experiencing instability, partly due to internal conflicts over political influence and the agency’s role as a non-partisan institution.
On Monday, the IRS and the Department of Homeland Security finalized a deal that permits the sharing of tax records with immigration officials to help locate undocumented immigrants.
According to The Washington Post, officials at the Treasury Department, which oversees the IRS, had recently excluded Krause from discussions about the agreement—likely because they anticipated her opposition.
The agreement was signed by Treasury Secretary Scott Bessent and Homeland Security Secretary Kristi Noem, despite legal concerns from IRS attorneys that the arrangement could violate privacy laws.
A Treasury spokesperson confirmed Krause’s resignation in a statement, praising her leadership during a period of major change. The spokesperson did not address the data-sharing deal but emphasized ongoing efforts to improve data transparency and fight fraud.
Krause’s decision to resign follows that of her predecessor, Doug O’Donnell, who also stepped down after refusing to sign a similar data-sharing deal in February. The last confirmed commissioner, Danny Werfel, resigned when President Trump took office.
Sources familiar with Krause’s decision say her resignation is partly tied to objections over the finalized agreement. She has applied for a deferred resignation option available through the IRS.
Meanwhile, the IRS has begun large-scale staffing cuts, including the shutdown of its civil rights office. Up to 25% of employees may lose their jobs as part of a broader government downsizing plan.
This overhaul is being led by billionaire Elon Musk, whom President Trump appointed to head the Department of Government Efficiency (DOGE). Over 200,000 federal jobs have already been eliminated under this initiative.
Earlier this month, Musk told Senator Ted Cruz that he had uncovered 14 internal government systems—referred to as “magic money computers”—which are allegedly transferring funds without proper oversight. Musk said these systems exist in several departments, including Treasury, Health and Human Services, the State Department, and the Department of Defense.
According to Musk, these systems are not fully transparent, and their activity could result in budget discrepancies of up to 5%, with Senator Cruz suggesting these could amount to trillions of dollars in unauthorized spending.
