Taxing times at the IRS
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The Internal Revenue Service — the agency with which you share some of your most personal information, and to which you remit a very large chunk of your paycheck — has had a torrid few months.
Why it matters: For such a crucial component of government machinery, it has been hard to tell who, if anybody, is in charge.
- That's a crucial question given the magnitude of changes afoot, including executive orders expected as soon as tomorrow — Earth Day — that would remove nonprofit status from a slew of environmental groups.
Flashback: It all began December 4, when President-elect Trump nominated Billy Long to lead the IRS. Long, a former auctioneer who joined Congress in 2011, had cosponsored legislation that would have abolished almost all taxes.
- Long, who had run up substantial debts in a failed 2022 Senate bid, reportedly had those debts paid off as donations rolled in after his nomination, many from tax consultants.
Then in January:
- The sitting IRS commissioner, Daniel Werfel, resigned on Inauguration Day, and replaced in an acting capacity by his deputy, Doug O'Donnell.
In February:
- The Department of Homeland Security asked IRS agents to help deport undocumented immigrants.
- Commerce Secretary Howard Lutnick said Trump wants to abolish the IRS.
- The agency fired 6,700 employees in the middle of tax filing season.
- Acting commissioner O'Donnell retired and was replaced by chief operating officer Melanie Krause.
In March:
- A federal judge ordered the IRS, along with other agencies, to rehire fired workers.
- The Trump administration complained to the IRS about the way in which Mike Lindell, friend of the president, had been audited twice in two years.
- Gary Shapley, an IRS agent who investigated Hunter Biden, was rehired by Treasury.
In April:
- IRS acting commissioner Krause resigned after the agency agreed to share confidential information with immigration authorities. She was replaced by Shapley.
- The IRS was sued in an attempt to prevent the data sharing, which the Trump administration claims is legal.
- Two senators called for a criminal fraud investigation into White River Energy Corporation, which paid Long thousands of dollars after he left Congress.
- The Trump administration asked the IRS to revoke the tax-exempt status of Harvard University.
- There were numerous reports that the IRS intends to abolish its popular Direct File program, which lets people file their taxes for free.
- Word came that about 40% of the IRS workforce could end up leaving as part of a "mass exodus," after around 22,000 have already opted to take the administration's latest "deferred resignation" buyout offer.
- Acting commissioner Shapley was replaced by deputy Treasury Secretary Michael Faulkender, after public sparring between Treasury Secretary Scott Bessent and Elon Musk.
What's next: There is no indication of when or whether the Senate Finance Committee will take up Long's nomination to lead the IRS, or if anyone is in a position to push back against White House attempts to politicize the agency.
For the record: "Any forthcoming actions by the IRS will be conducted independently of the President," White House spokesman Harrison Fields said in a statement to the Wall Street Journal.
- Neither the White House nor the Treasury provided comment to Axios on the IRS turmoil.
