By Richard Rubin and Tarini Parti

WASHINGTON -- President Trump is replacing the acting IRS commissioner that he appointed just three days earlier, continuing the upheaval at the top of the tax agency, according to people familiar with the matter.

Deputy Treasury Secretary Michael Faulkender will now run the Internal Revenue Service, becoming the fifth person to hold that job so far this year.

He replaces Gary Shapley, the former IRS criminal investigator who had criticized the government's investigation of Hunter Biden. Shapley, who had already been working at the Treasury Department, moved into the top IRS job on Tuesday. A memo signed by Trump appointed him to the post. Republicans, including Sen. Chuck Grassley (R., Iowa), cheered Shapley's appointment.

Shapley had replaced former IRS executive Melanie Krause, who had replaced longtime IRS official Douglas O'Donnell, who had replaced Danny Werfel, the Biden-nominated commissioner who resigned on Inauguration Day. Shapley is expected to remain a senior official in the IRS's criminal investigation division, one of the people said.

Trump has tapped Billy Long, a former Republican congressman from Missouri, to run the agency. The Senate Finance Committee hasn't scheduled his confirmation hearing, and Democrats are criticizing Long's ties to firms promoting questionable tax credits.

The Trump administration has been shrinking the IRS, reversing the Biden-era expansion that bolstered tax enforcement. The IRS fired more than 7,000 probationary employees earlier this year. About 20,000 more expressed interest in taking a deferred-resignation offer and layoffs are possible. The agency started the year with about 102,000 workers.

The administration, in coordination with Elon Musk's Department of Government Efficiency, has also been reworking IRS computer systems, aiming to reduce the government's reliance on outside contractors and accelerate its deployment of new technology. The administration has also pushed an agreement for the IRS to share certain data with immigration authorities that it had previously not disclosed.

The New York Times earlier reported Shapley's exit from the acting commissioner job.

Faulkender served in the Treasury Department in a nontax role during the first Trump administration, working on the Paycheck Protection Program and other issues before returning to the University of Maryland, where he taught finance courses. The Senate voted 53-43 last month to confirm him as deputy secretary.

Write to Richard Rubin at richard.rubin@wsj.com and Tarini Parti at tarini.parti@wsj.com

(END) Dow Jones Newswires

April 18, 2025 13:31 ET (17:31 GMT)

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