On the inaugural day of President Donald Trump’s second term, IRS Commissioner Danny Werfel unexpectedly resigned. While IRS commissioners typically serve a five-year term, it is customary for them to step down during their fourth year. However, it’s not unusual for them to remain in their role when a new president is inaugurated. Therefore, Werfel’s resignation marks a significant departure from the norm.
In response to Werfel’s resignation, President Trump has nominated Billy Long, a former congressman from Missouri, as his successor. However, Long’s appointment has yet to receive Senate confirmation, and there is currently no scheduled hearing for his confirmation. In the interim, the IRS is operating under an acting commissioner.
Since Werfel’s departure, the IRS has seen a rapid succession of four acting commissioners within a mere three months, indicating instability at the top.
The first to step in as acting commissioner was Douglas O’Donnell, a seasoned IRS veteran with 40 years of experience. O’Donnell previously held the acting commissioner position from November 2022 until March 2023, after former Commissioner Charles Rettig stepped down. During his brief tenure, the IRS made significant staff reductions, laying off thousands of employees, primarily new hires. Additionally, he faced challenges from the Department of Government Efficiency (DOGE), which demanded access to IRS data systems potentially containing sensitive taxpayer information. O’Donnell ultimately retired from the IRS on February 28, 2025.
Following O’Donnell, Melanie Krause, the IRS Chief Operating Officer, took over as acting commissioner until April 8, 2025. Krause’s resignation came shortly after the IRS reached a controversial agreement with the Department of Homeland Security, allowing the IRS to share taxpayer data with Immigration and Customs Enforcement (ICE). This data sharing raised concerns about its potential use for deportation efforts. Furthermore, Krause’s decision to resign was influenced by the agency’s future direction and the resignations of other senior IRS officials.
Gary Shapley was appointed as acting commissioner on April 16, 2025, after Krause. Shapley has a long career within the IRS’s criminal investigation division and gained public attention for his testimony before Congress regarding the Hunter Biden tax investigation. His appointment received an endorsement from Elon Musk, but shortly thereafter, it was rescinded when Treasury Secretary Scott Bessent expressed that he had not been informed of Shapley’s appointment. Despite this setback, Shapley will continue to serve as a senior advisor within the agency.
The current acting commissioner is Deputy Treasury Secretary Michael Faulkender, who was chosen for the role by Bessent. Faulkender previously served as the Assistant Secretary of the Treasury for Economic Policy during Trump’s first term, indicating a level of trust and continuity in the administration.
The role of IRS commissioner is a high-level management position, resulting in minimal direct contact with average IRS employees. Nevertheless, many IRS staff members are likely to be concerned about whether the new commissioner will support Trump and DOGE’s initiatives aimed at reducing IRS personnel. There’s a palpable uncertainty regarding whether this new leadership will advocate for a reconsideration of the president’s strategic approach.
The public’s reaction to these developments is varied. Approximately half of the population perceives this situation as a clear example of Trump’s incompetence, or as evidence that experienced IRS leadership lacks confidence in the agency’s future direction. This uncertainty may prompt some taxpayers to consider taking bolder and more creative approaches in their tax return preparations.
Tax professionals universally advise against any attempts to falsify tax returns, emphasizing that the IRS possesses substantial resources to detect discrepancies. If taxpayers find themselves selected for an audit, the current staff shortages may lead to prolonged audit processes or the assignment of overworked auditors.
How long can we expect Faulkender to remain in this role? He is not aligned with the traditional IRS leadership, has previously collaborated with Trump, and enjoys the support of the Treasury Secretary. Consequently, it is highly likely that he will maintain his position until a permanent commissioner is appointed.
The new acting commissioner faces a formidable challenge ahead. They will oversee what could be one of the most significant workforce reductions in the IRS’s history and will need to make critical decisions regarding funding and resource allocation. Additionally, the commissioner may encounter contentious issues. For instance, President Trump has recently suggested that the IRS revoke Harvard University’s tax-exempt status, asserting that the institution is not doing enough to combat antisemitism on campus. The commissioner must work to reassure the public that the IRS remains impartial and will not be used as a political tool, despite the president’s provocative social media posts that might suggest otherwise.
Steven Chung is a tax attorney based in Los Angeles, California, specializing in tax planning and resolving tax disputes. He is particularly empathetic towards individuals burdened with substantial student loans. He can be contacted via email at stevenchungatl@gmail.com. For social media engagement, connect with him on Twitter (@stevenchung) and on LinkedIn.
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