Acting IRS Commissioner Melanie Krause felt slighted after Secretary of the Treasury Scott Bessent and Homeland Security Secretary Kristi Noem struck a deal for the tax agency to share data with DHS on illegal aliens. She decided to resign and take the government buyout that Trump offered.
Sources told the Washington Post that disagreements over the agency’s direction also factored into Krause’s decision to leave.
Krause is the third agency leader to leave since Trump took office. One of the sources told the Post, “I don’t think we’ve seen anything like this at IRS.”
The last confirmed IRS chief was a Biden appointee, Danny Werfel. He resigned on Trump's first day in office. Doug O’Donnell quit rather than deal with Elon Musk's Department of Government Efficiencies (DOGE).
During negotiations, IRS lawyers told Bessent and Noem that the deal probably violated privacy laws.
Trump and Musk want to overturn the entire privacy regime that prevents the IRS from sharing data with other government agencies. They're contemplating building a "cross-government data-sharing system," reports the Post, "that would allow agencies to use personal tax information to hunt for fraud in social safety net programs."
It should be remembered that the next Democratic administration will adopt anything Trump does, and in the case of using IRS information, it won't be looking for illegals or sniffing out fraud when using tax data.
Monday’s agreement with DHS would permit immigration enforcement officials to obtain highly protected tax information for people the Trump administration hopes to detain and deport. A redacted copy of the memorandum was filed in the U.S. District Court for Washington, D.C., as part of a lawsuit brought by worker and immigrant advocacy groups seeking to block the data-sharing.
The possibility of such an agreement had raised alarms among current and former IRS officials, who said it was a privacy breach and contravened the tax agency’s longtime guarantee that taxpayers suspected of being in the country illegally wouldn’t have their information turned over to immigration enforcement. Undocumented workers’ wages are subject to the same tax withholding and reporting requirements that applies to other U.S. residents.
The IRS had no authority to make that guarantee. But the privacy issues are going to be a problem. especially given the massive scope of the agreement.
Under the terms of Monday’s agreement, Immigration and Customs Enforcement officials must provide the targeted person’s name and address, and the specific reason the disclosure could be relevant to a non-tax-related criminal investigation.
DHS spokeswoman Tricia McLaughlin said the “government is finally doing what it should have all along: sharing information across the federal government to solve problems.”
The memorandum sets out a “clear and secure process to support law enforcement’s efforts to combat illegal immigration,” a Treasury Department spokesperson said.
Trump plans to cut the IRS workforce by 25%. It's unclear how the IRS can meet the labor-intensive job of investigating the deportation of millions of illegals with a drastically reduced workforce.
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