Acting IRS Chief Resigns Over Data-Sharing Dispute on Undocumented Immigrants

Melanie Krause, the acting head of the Internal Revenue Service, is stepping down after reportedly opposing a new agreement that allows federal immigration authorities access to taxpayer data.

Krause becomes the third IRS leader to resign this year. According to the Washington Post, she had been increasingly sidelined by Treasury Department officials, who moved forward with the agreement despite internal legal concerns.

On Monday, the IRS and the Department of Homeland Security finalized the deal to share tax data to help track undocumented immigrants. IRS attorneys reportedly warned the arrangement could violate federal privacy laws, but Treasury Secretary Scott Bessent and DHS Secretary Kristi Noem signed off anyway.

A Treasury spokesperson confirmed Krause’s resignation, praising her leadership but not directly addressing the data-sharing controversy.

Krause follows her predecessor Doug O’Donnell, who also resigned after declining to support a similar agreement in February. The last Senate-confirmed IRS Commissioner, Danny Werfel, resigned in 2017.

Sources told Reuters that Krause plans to take part in the IRS’s deferred resignation program and that her decision was influenced in part by concerns over the legality and ethics of the new policy.

The IRS is currently undergoing major restructuring, including mass staff reductions and the closure of its civil rights office, as part of a broader federal workforce overhaul under President Donald Trump’s administration.