The stand-in boss of the IRS has walked out after just a month on the job after she was bypassed over a new plan to hand immigrants’ tax data to officials from Immigration and Customs Enforcement, according to agency insiders.
The Internal Revenue Service has made an agreement with the Department of Homeland Security that would allow agency officials to use tax data to confirm the names and addresses of people suspected of being in the United States illegally, thus streamlining President Donald Trump’s mass deportation efforts.
Melanie Krause, the agency’s acting commissioner since Feb. 28, learned of this deal after seeing details on Fox News, according to The Washington Post. The snub, and concerns over the direction of the agency, inspired her exit, the Post reported. Her move was confirmed by a Treasury Department spokesperson.
The WaPo insiders, meanwhile, claimed that Treasury Department officials largely bypassed Krause and other executives at the IRS when trying to access private taxpayer information. Lawyers from the IRS warned that the practice is potentially illegal, but Treasury Secretary Scott Bessent and Homeland Security Secretary Kristi Noem signed an agreement Monday allowing it anyway.
Krause’s exit contributes to the “unprecedented” exodus at the IRS, after two other commissioners left in recent months. “I don’t think we’ve seen anything like this at IRS,” one of the insiders told the Post.
Krause, formerly the IRS’s chief operations officer, will reportedly take part in Trump’s deferred resignation program offered to employees at the agency.
“She no longer feels like she’s in a position where she can impact the decision-making that’s happening,” a person familiar with the situation told the newspaper. “And [she believes] that some of the decisions that are being made now are things the IRS can never recover from.”
Krause took on the job of trying to work alongside Elon Musk’s Department of Government Efficiency and oversaw a period where the agency was informed it would lose up to 25 percent of its workforce, or about 20,000 jobs.
However, she reportedly felt too much pushback from DOGE and decided to leave her position. Her predecessor, Doug O’Donnell, retired instead of facing working alongside Musk and DOGE.
His predecessor was Biden-appointee Danny Werfel. He decided to resign when Trump returned the White House in January rather than waiting to be fired.
A Treasury Department spokesperson told the Daily Beast: “The Internal Revenue Service and the Immigration and Customs Enforcement have entered into a memorandum of understanding to establish a clear and secure process to support law enforcement’s efforts to combat illegal immigration.”
“The bases for this MOU are founded in longstanding authorities granted by Congress, which serve to protect the privacy of law-abiding Americans while streamlining the ability to pursue criminals,” the spokesperson added. “After four years of Joe Biden flooding the nation with illegal aliens, President Trump’s highest priority is to ensure the safety of the American people.”
