WASHINGTON (Diya TV) — Acting IRS Commissioner Melanie Krause announced her resignation Tuesday, stepping down amid internal upheaval at the Internal Revenue Service and growing controversy over a newly finalized data-sharing agreement with immigration authorities.
According to two current IRS employees and one former employee, Krause’s decision follows the Department of Homeland Security (DHS) and the IRS signing an agreement to provide sensitive taxpayer information to assist in locating and deporting undocumented immigrants. The deal, finalized Monday, was reportedly a breaking point for Krause, who had reviewed a prior draft but was unaware of the finalized terms until media coverage surfaced, a source familiar with the matter told CNN.
Multiple senior IRS officials reportedly refused to sign the memorandum of understanding (MOU) with DHS, citing serious legal concerns, leading to an unusual move: Treasury Secretary Scott Bessent ultimately signed the agreement himself, according to CNN’s exclusive reporting.
Krause, who had been with the IRS for just over three and a half years, took over as acting commissioner earlier this year following the resignation of Doug O’Donnell. O’Donnell, who previously served in the same acting role, also left shortly after refusing to sign an earlier version of the data-sharing agreement in February. He had succeeded Danny Werfel, the Biden-appointed and Senate-confirmed commissioner, who resigned on Inauguration Day.
This marks the third leadership departure at the IRS this year, underscoring a period of significant instability at the nation’s tax agency.
In a statement, a Treasury Department spokesperson praised Krause’s service, saying, “Melanie Krause has been leading the IRS through a time of extraordinary change. As we focus on IT modernization and re-organize the agency to better serve the taxpayer, we are also breaking down data silos that for too long have stood in the way of identifying waste, fraud, and abuse and bringing criminals to justice. We wish Melanie well on her next endeavor.”
However, the atmosphere behind the scenes suggests deeper discontent. Sources told CNN that senior career IRS employees viewed the data-sharing deal with DHS as a serious overreach, with legal and ethical implications that had not been adequately addressed. Krause’s resignation appears tied not just to the MOU’s approval but to broader concerns over the agency’s trajectory.
One of those concerns involves a growing push within the administration to reassign IRS criminal investigators to immigration enforcement tasks. The proposal, under internal discussion, could involve relocating the IRS Criminal Investigation Division directly under the Department of the Treasury, sources said.
Krause and other IRS leaders have reportedly faced sustained pressure in recent weeks from Treasury and administration officials as these changes take shape. As CNN reported earlier Tuesday, that pressure, combined with unease over the data-sharing agreement, has led to a wave of resignations among top IRS officials.
The deal, part of the Trump administration’s ongoing immigration enforcement strategy, has drawn sharp criticism from privacy advocates and tax law experts. They argue that using taxpayer data for immigration enforcement undermines long-standing IRS policies designed to protect the confidentiality of tax information and promote voluntary compliance.
The IRS and Treasury have not commented on the legal concerns raised by officials within the agency. Meanwhile, the Biden administration has remained largely silent on the internal turmoil surrounding the IRS leadership departures.
With Krause’s resignation, the IRS faces yet another leadership vacuum at a time when it is tasked with major modernization efforts and enforcement expansion funded by the Inflation Reduction Act.
