By Richard Rubin

WASHINGTON -- Acting IRS Commissioner Melanie Krause plans to leave the agency soon, said people familiar with her decision, extending an unusual period of turmoil at the Internal Revenue Service as the Trump administration shrinks and reshapes the tax agency.

The development comes a week before the individual income tax-filing deadline, in the IRS's busiest time of year. Krause took a deferred-resignation offer available to many federal employees, and is expected to depart the government April 28.

Krause will become the third IRS chief to exit this year, and her replacement would be the agency's fourth leader in four months. Danny Werfel, who had been nominated and confirmed to the job under former President Joe Biden, left on Inauguration Day. His successor, longtime agency official Douglas O'Donnell, exited in late February. President Trump has nominated Billy Long to run the IRS, but he hasn't yet had a Senate confirmation hearing.

Other IRS executives, including Chief Financial Officer Teresa Hunter and Chief Privacy Officer Kathleen Walters, are leaving the government or planning to leave, the people familiar with the matter said. Mike Wetklow, the chief risk officer, is also leaving the IRS.

Since Trump took office, his administration has cut thousands of jobs at the IRS and could be aiming for thousands more layoffs in the months ahead, more than reversing a Biden-era expansion. The Trump administration has paused some information-technology contracts and is pursuing a rethinking of the agency's modernization efforts.

The Trump administration also has moved to use IRS data to authorities locate people who have violated criminal immigration laws. On Monday, Treasury Secretary Scott Bessent and Homeland Security Secretary Kristi Noem signed an agreement allowing data-sharing between the IRS and Immigration and Customs Enforcement officials.

The agreement, disclosed in partially redacted form in court filings, would let the IRS give ICE certain address information. Taxpayer privacy law generally prohibits the IRS from sharing taxpayer data, though it does contain limited exceptions, including one for criminal investigations.

For years, the IRS has been encouraging people living and working illegally in the U.S. to file tax returns and comply with the tax law, promising not to share that information with immigration authorities. The idea was to encourage tax compliance.

"Now we know that the IRS is in fact going to share taxpayer information with ICE and they're going to do it without forcing ICE to get a court order," said Nandan Joshi, an attorney at Public Citizen who is representing immigration groups challenging the data-sharing agreement. "It's hard to know exactly how extensive the sharing is."

Administration officials said it is important to use the government's data, and they said the agreement complies with the law. They highlighted that the taxpayer-privacy statute has an explicit exception for the IRS to provide information for certain criminal proceedings.

"Under President Trump's leadership, the government is finally doing what it should have all along: sharing information across the federal government to solve problems," said DHS Assistant Secretary Tricia McLaughlin.

The Washington Post earlier reported Krause's expected departure.

Write to Richard Rubin at richard.rubin@wsj.com

(END) Dow Jones Newswires

April 08, 2025 20:16 ET (00:16 GMT)

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