On the first day of President Donald Trump’s second term, the Internal Revenue Service (IRS) experienced an unexpected leadership shift with the resignation of then-Commissioner Danny Werfel. While IRS commissioners typically serve five-year terms, it is customary for them to remain for a time during the transition to a new administration. Werfel’s premature departure raises questions about the stability and direction of the agency at a critical juncture in U.S. fiscal policy.
Trump has nominated Billy Long, a former congressman from Missouri, to succeed Werfel. However, Long’s appointment has yet to be confirmed by the Senate. The absence of a confirmed commissioner has led to a rapidly changing landscape within the IRS; since Werfel’s exit, four different individuals have stepped into the role of acting commissioner, complicating governance at the agency.
Initially, Douglas O’Donnell took the reins as acting commissioner. O’Donnell, a seasoned employee with 40 years of service at the IRS, had previously served in the same capacity from November 2022 to March 2023 following the resignation of former Commissioner Charles Rettig. During his brief tenure, the IRS faced significant challenges including the layoff of thousands of employees, primarily those newly hired. This cost-cutting initiative coincided with pressures from the Department of Government Efficiency (DOGE) that demanded access to IRS data systems, which could include sensitive taxpayer information. O’Donnell ultimately retired on February 28, 2025.
Following O’Donnell, Melanie Krause, then the IRS’s Chief Operating Officer, assumed the role of acting commissioner. Her appointment lasted until April 8, 2025, when she resigned shortly after the IRS established a partnership with the Department of Homeland Security, agreeing to share taxpayer data with Immigration and Customs Enforcement (ICE). The decision to collaborate with ICE raised eyebrows, particularly with regard to privacy concerns and the potential for using taxpayer information for deportation purposes. Krause’s resignation has been attributed not only to this controversial agreement but also to the evolving objectives of the IRS amidst resignations of several senior officials.
Gary Shapley stepped in next on April 16, 2025. Shapley, known for his work in the IRS’s criminal investigation division and for his testimony before Congress regarding the Hunter Biden tax investigation, was briefly touted as a suitable candidate endorsed even by notable figures outside of political circles such as entrepreneur Elon Musk. However, just days later, his appointment was rescinded following complaints from Treasury Secretary Scott Bessent that the process had not included adequate consultation with his office. Despite this setback, Shapley remains with the agency, continuing in a senior advisory capacity.
The current acting commissioner is Michael Faulkender, Deputy Treasury Secretary, who was appointed following the complexities around Shapley’s short-lived tenure. Faulkender was previously appointed by Trump as the Assistant Secretary of the Treasury for Economic Policy, instilling confidence in some former officials about his alignment with the administration’s objectives.
The IRS commissioner position holds significant importance, albeit often distant from the daily operations experienced by the bulk of IRS employees. The overarching concern for staff members is how the new appointee will align with President Trump’s directives, particularly the prioritization of budget cuts that could impact staff reductions within the agency. Observers have noted a divided public perception regarding these changes; approximately half the population views the ongoing turnover in leadership as indicative of Trump’s ineptitude or a lack of confidence among experienced IRS staff in the agency’s direction. Taxpayers may feel uncertain, potentially leading to more aggressive strategies in tax return preparation.
Tax professionals stress the importance of compliance, warning against any inclination to falsify tax returns. They emphasize that even amidst staff shortages, the IRS maintains robust audit capabilities that could complicate matters for those engaging in dishonest practices. As the IRS adjusts to leadership fluctuations, the fear of drawn-out audits may linger, particularly for taxpayers encountering inexperienced personnel.
Looking ahead, the duration of Faulkender’s acting role remains uncertain. However, his previous experience with Trump and the Treasury Secretary’s support suggest he may serve until a permanent commissioner is confirmed. The challenges facing the incoming commissioner are substantial, including overseeing what could become one of the largest workforce reductions in IRS history. In addition, the new commissioner must deftly allocate resources at a time when political tensions regarding the IRS are high.
Recent communications from Trump have sparked significant debate, notably his suggestion that the IRS should revoke the tax-exempt status of Harvard University, arguing the institution has not adequately addressed issues related to antisemitism on campus. Such pronouncements pose considerable challenges for the IRS leadership. The acting commissioner will be tasked with ensuring that the agency operates fairly and without political interference, even in the face of occasional incendiary remarks from the President himself.
The implications of these leadership changes extend beyond internal operations. The IRS plays a pivotal role in tax administration and enforcement, a facet of governance that impacts the broader economy and public trust. As the agency grapples with its new leadership dynamic during a time of political polarization, it remains to be seen how effectively it can navigate these complexities while upholding its foundational commitment to serve the American taxpayer.
Steven Chung, a tax attorney based in Los Angeles, underscores the gravity of these developments within the IRS. Specialized in tax planning and resolving disputes, Chung notes the agency’s current struggles resonate with taxpayers nationwide, particularly those burdened by student loans. For individuals seeking clarity in these tumultuous times, maintaining open lines of communication with financial professionals remains paramount.
As this landscape continues to evolve, the ramifications of leadership changes within the IRS will likely unfold against the backdrop of broader discussions about tax policy, fiscal responsibility, and public accountability within federal institutions. Meanwhile, stakeholders—including taxpayers, tax professionals, and policymakers—will be left to watch closely as the IRS navigates a path forward amid significant uncertainty.