White House Reveals Unexpected High-Level Resignation
On Tuesday, the Treasury Department announced the resignation of the acting Internal Revenue Service chief, following internal disagreements about a controversial data-sharing initiative involving tax records and immigration enforcement.
Commissioner Melanie Krause is now set to become the third head of the IRS to leave the agency this year, amid growing criticism that "left-wing ideologues" have been prioritizing political agendas over their duty to act as neutral public servants.
The IRS and the Department of Homeland Security reached an agreement on Monday, allowing federal immigration authorities access to taxpayer information to assist in locating undocumented immigrants.
According to The Washington Post, senior Treasury officials—who have direct oversight of the IRS—had been largely sidelining Krause in recent discussions, likely anticipating her disapproval of the agreement.
Despite strong objections from IRS attorneys, who warned that the deal could violate federal privacy laws, Treasury Secretary Scott Bessent and Homeland Security Secretary Kristi Noem signed off on the controversial arrangement, the report noted.
In an internal message confirming her departure, a Treasury official stated that “Melanie Krause has been leading the IRS through a time of extraordinary change.”
Without mentioning the agreement, a spokesperson praised ongoing efforts at the agency to dismantle long-standing “data silos that for too long have stood in the way of identifying waste, fraud, and abuse and bringing criminals to justice.”
Krause’s resignation follows the departure of Doug O’Donnell, who stepped down in February after declining to approve a similar data-sharing plan. Danny Werfel, the last Senate-confirmed IRS commissioner, resigned on the first day of the Trump administration.
A source familiar with Krause’s move said she is opting for a delayed resignation package now available through the IRS. The source, who spoke anonymously to Reuters, indicated that concerns about the new data deal were a factor in her decision.
At the same time, the IRS has begun implementing deep staffing reductions. On Friday, the agency dismantled its civil rights division and began widespread layoffs that could ultimately cut up to a quarter of its workforce.
These job cuts—part of a broader federal government overhaul—have already eliminated more than 200,000 positions. The restructuring is being led by Elon Musk, appointed by President Donald Trump to head the Department of Government Efficiency (DOGE).
Earlier this month, Musk raised concerns in a conversation with Sen. Ted Cruz (R-TX), warning that the government’s financial systems—dubbed “magic money computers”—were issuing payments “out of thin air” without lawmakers’ knowledge.
Musk told Cruz on his podcast that agencies like the Treasury possess 14 of these systems, which are moving large sums of money without adequate documentation or oversight.
Cruz suggested that these undocumented transfers could total in the “trillions,” while Musk noted that departments housing these systems might be underreporting their budgets to Congress by as much as 5%.
Referring to the DOGE team’s findings, Musk said, “They’re mostly at Treasury, but there’s some at [Health and Human Services], there’s one or two at State, and there’s some at [the Department of Defense].”
“I believe we have now located fourteen magic money computers,” Musk told Cruz. “They just send money out of nothing.”
He emphasized that these machines hinder transparency, saying lawmakers are misled into thinking government accounts are fully synchronized and accurate. “As a senator, you may believe that the figures you see are accurate… Not at all,” Musk asserted.