Melanie Krause, the Acting Commissioner of the Internal Revenue Service (IRS), has announced her resignation amid controversy surrounding a newly finalized data-sharing agreement between the IRS and the Department of Homeland Security (DHS).
This agreement allows Immigration and Customs Enforcement (ICE) to access sensitive taxpayer information to identify and deport undocumented immigrants. Krause’s resignation marks the third leadership departure at the IRS since January 2025, highlighting ongoing turmoil within the agency.
Krause, who has been with the IRS for just over three years, stepped into the acting commissioner role in February following the retirement of Doug O’Donnell, who also resigned after refusing to sign a similar data-sharing agreement. Her decision to leave was reportedly influenced by concerns over the final terms of the agreement, which differed from earlier drafts she had reviewed.
Krause learned about these changes through media reports, further fueling her dissatisfaction. Additionally, a wave of senior staff resignations and internal disagreements over the legality of sharing taxpayer data contributed to her decision.
The data-sharing deal has sparked widespread criticism from privacy advocates and tax law experts, who argue it violates longstanding taxpayer confidentiality protections. The agreement allows ICE to cross-reference names and addresses of undocumented immigrants against IRS records, a move seen as part of former President Donald Trump’s broader immigration enforcement strategy. Critics fear this could erode trust in the IRS and deter undocumented individuals from filing taxes.
Krause’s resignation comes at a critical time for the IRS, which is already facing significant challenges, including mass layoffs and organizational restructuring under Elon Musk’s Department of Government Efficiency.
As the tax filing season reaches its peak, her departure adds to the instability within an agency tasked with managing one of the most complex tax systems in the world. The IRS will now seek its fourth leader in just three months, further complicating efforts to modernize its operations and maintain public confidence.