Acting IRS chief to retire amid upheaval at agency

(CNN) — The acting head of the Internal Revenue Service plans to retire Friday, the agency announced Tuesday, after weathering weeks of chaos and cutbacks at the agency since President Donald Trump took office.

Acting IRS Commissioner Doug O’Donnell’s departure comes abruptly as the agency heads into the crunch time of tax filing season.

Treasury Secretary Scott Bessent announced in a news release that the IRS will be led by Melanie Krause, the agency’s chief operating officer who has been sympathetic to Elon Musk’s Department of Government Efficiency efforts within the agency. Trump intends for former Rep. Billy Long to head the IRS.

“The IRS has been my professional home for 38 years,” O’Donnell said in a news release. “I care deeply about the institution and its people and am confident that Melanie will be an outstanding steward of the Service until a new Commissioner is confirmed.”

He was named temporarily to the role after IRS Commissioner Daniel Werfel stepped down when Trump took office last month. The New York Times was first to report on O’Donnell’s retirement.

Krause’s elevation comes after she spent several years as the IRS’ top data specialist before being promoted to chief operating officer last April. To some within the agency, Krause is seen as more sympathetic to DOGE’s work within the Treasury Department than other long-time career officials.

DOGE’s attempts to gain access to software systems and data at the IRS and within the Treasury Department have spurred significant pushback both within the department and in court, where privacy cases have limited some access to private information and code.

DOGE is seeking to gain access to the IRS’ data systems, which hold highly sensitive personal and financial information on more than 100 million individual tax filers and businesses. A group of taxpayer advocates, small-business groups and unions filed an emergency lawsuit in federal court to “halt DOGE’s unfettered and lawless access to personal data at levels (that) endanger the privacy of hundreds of millions of Americans.” The judge hasn’t yet responded to the requests in the case.

The IRS fired nearly 7,000 workers last week, according to a person familiar with the agency. The workers who lost their jobs were more recently hired and therefore had probationary status, making them easier to cut loose, the source said.

The IRS workers who lost their jobs were described as largely auditors and support workers involved in compliance work, many of whom were hired during the last months of the Biden administration.

This story has been updated with additional developments.

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