In recent weeks, the Internal Revenue Service has lost its chief of staff, its chief financial officer, its chief information officer and its top officials overseeing privacy and risk policy, all of which has had a predictably destabilizing effect on the tax agency.
But to fully appreciate just how ridiculous conditions have become at the IRS, consider the revolving door in the commissioner’s office. The New York Times reported:
The acting commissioner of the Internal Revenue Service is being replaced after Treasury Secretary Scott Bessent complained to President Trump that the latest leader of the agency had been installed without his knowledge and at the behest of billionaire Elon Musk. ... Mr. Bessent believed that Mr. Musk had done an end run around him to get Gary Shapley installed as the interim head of the I.R.S., even though the tax collection agency reports to Mr. Bessent. Mr. Musk’s Department of Government Efficiency pushed the appointment through White House channels, but Mr. Bessent was not consulted or asked for his blessing, the people said.
NBC News has confirmed the fact that Shapley has been ousted.
The Times’ report added that the next acting IRS chief is expected to be the deputy secretary of the Treasury, Michael Faulkender. If that proves true, he’ll be the fifth person to serve as the IRS’ leader in the last three months.
In January, then-IRS Commissioner Danny Werfel, who was nominated by Joe Biden, resigned on Inauguration Day as Donald Trump prepared to replace him. Werfel was followed by Doug O’Donnell, a longtime IRS official, who stepped down a month later.
O’Donnell was followed by Melanie Krause, who resigned after just two months on the job, which was an understandable response to an unprecedented and legally dubious gambit launched by the administration. She was followed by Shapley — a political ally to Trump who raised concerns about Hunter Biden’s taxes — who was apparently installed by Musk earlier this week.
In the president’s first term, Anthony Scaramucci famously exited the White House after 11 days as Trump’s communications director. This week, Shapley’s tenure at the IRS ended after just half a Scaramucci.
CNBC reported this week that tax attorneys have started to look at the IRS as a “zombie” agency that struggles to complete its work, and it’s not hard to understand why.
The problems appear likely to get worse before they get better: The New York Times reported this week that roughly 22,000 IRS employees “have signed up for the Trump administration’s latest resignation offer, according to four people familiar with the matter, an exodus that could weaken the agency’s ability to collect taxes.”
Complicating matters further, the problems are not limited to personnel matters. As we’ve discussed, the IRS is also dealing with DOGE-driven disruptions, which are poised to be extraordinarily expensive while simultaneously abandoning a much-needed IRS modernization initiative and taking steps to politicize the agency’s criminal division.
And just in case it seemed as if this story couldn’t get even worse, the president also appears to be eager to sic the IRS on his perceived political foes — in effect, trying to turn the agency into a political weapon — while the IRS faces alleged internal pressure to help those who are considered “friends” of the president.
I’m mindful of the fact that Trump and some of his allies have said he believes the IRS can be replaced thanks to tariff revenue, but given the latest data, the White House should probably be looking for a Plan B as the existing tax agency faces repeated rounds of Trump-imposed chaos.
