Acting IRS commissioner Melanie Krause is stepping down—she reportedly is applying for the second deferred resignation program, or DRP 2.0, being offered to IRS employees—after the agency reached an agreement with the Department of Homeland Security earlier this week to share the data of immigrants in the U.S. illegally to assist with immigration enforcement.
Krause is the third leader of the tax agency to leave since the start of 2025. Danny Werfel, who served as IRS commissioner during the Biden administration, resigned on Jan. 20—the day of Donald Trump’s second inauguration as president. Werfel was replaced by deputy commissioner Douglas O’Donnell, who served as acting IRS chief until his retirement on Feb. 28 after roughly 40 years of service as furor spread over Elon Musk’s Department of Government Efficiency gaining access to IRS taxpayer data. Krause, who was the agency’s chief operating officer, took over as acting commissioner following O’Donnell’s retirement.
Billy Long, a Republican congressman from Missouri from 2011 until 2023, was nominated by Trump to be the next IRS commissioner; however, the Senate has yet to schedule confirmation hearings for Long.
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Krause began her IRS career in October 2021 as the chief data and analytics officer. In addition to leading the research, applied analytics and statistics (RAAS) team, Krause also coordinated research activities, including using artificial intelligence and other advanced analytics. Krause also served as acting deputy commissioner for services and enforcement from November 2022 to March 2023.
Prior to joining the IRS, Krause spent 12 years in the federal oversight community, including the Government Accountability Office and the Department of Veterans Affairs Office of Inspector General. She also maintains an active license as a registered nurse.
She is reportedly stepping down as acting IRS commissioner over the new data-sharing document signed on Monday by Treasury Secretary Scott Bessent and Homeland Security Secretary Kristi Noem. The agreement will allow Immigration and Customs Enforcement to submit names and addresses of immigrants inside the U.S. illegally to the IRS for cross-verification against tax records.
“DHS can legally request return information relating to individuals under criminal investigation, and the IRS must provide it,” Andrew J. Weisberg, a tax division attorney with the Department of Justice, wrote Monday in opposition to a lawsuit by advocacy organizations seeking to block the sharing of tax information with immigration authorities.
The memorandum of understanding, signed by Bessent and Noem and dated April 7, was included in the filing as an attachment.
The data-sharing exercise is aimed at assisting ICE agents find undocumented migrants faster and helping the Trump administration achieve its goal of administering the largest deportation program in U.S. history.
Critics, including immigrant advocacy groups and privacy proponents, argue that the agreement violates longstanding taxpayer confidentiality protections and could deter undocumented immigrants from fulfilling their tax obligations.
Immigrant-rights groups had filed a federal lawsuit against the U.S. Department of the Treasury and the IRS, seeking to block the potential release of taxpayer data to assist with immigration enforcement.
The plaintiffs, including the Illinois-based Centro de Trabajadores Unidos, argue that sharing this data would violate strict confidentiality provisions in the IRS code, which limit how taxpayer information can be disclosed. They also warn that the move would betray the trust of millions of immigrants who file taxes using Individual Taxpayer Identification Numbers, despite lacking legal immigration status, and who contribute billions in federal and state revenue each year.
The U.S. government has filed a motion to dismiss the lawsuit, saying the immigrant groups cannot show concrete imminent harm to their organizations or members. It maintains that the memorandum between the IRS and DHS fully complies with existing law, permitting the sharing of certain tax information for criminal investigations under strict safeguards.
“Federal law clearly protects taxpayer privacy. This agreement is illegal,” declared Public Citizen, one of the groups involved in the lawsuit against the government. “This is an assault on every single taxpayer’s rights and will destroy lives.”
Sen. Jacky Rosen (D-NV) called the new agreement “shameful” in that it breaks a promise that information immigrants provided to the IRS to pay their taxes would not be used against them.
“The U.S. Senate must hold immediate hearings with Treasury and DHS leadership to get direct answers and hold them accountable,” Rosen said in a statement.
The government asserts that no information has been shared under the memorandum to date, and any future disclosures would be lawful and protected by stringent confidentiality requirements.
The court is set to consider plaintiffs move for a preliminary injunction and the government’s motion to dismiss the case. If dismissed, it would mark a significant setback for immigrant rights groups, who are in the midst of a legal maelstrom with the Trump administration.
The outcome could also set an important precedent for how federal tax data is protected—and how far the government can go in using it to enforce immigration policy.
With Tribune News Service
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