Leadership Crisis at the IRS: A Swift Change of Guard

The Internal Revenue Service (IRS) is currently navigating an unprecedented leadership crisis, marked by a rapid succession of commissioners within a short span of time. In a significant announcement, Secretary of the Treasury Scott Bessent revealed that Melanie Krause, the IRS Chief Operating Officer, will step into the role of Acting IRS Commissioner. This change follows the retirement of Doug O’Donnell, who served as Acting Commissioner for a brief period. O’Donnell’s tenure ended just 39 days after he took over, marking the third commissioner to hold the position in over a month. This leadership shuffle has raised eyebrows, particularly as it coincides with a critical period leading up to the April tax deadline.

The Departure of Danny Werfel and the Beginnings of the Crisis

The roots of this leadership crisis can be traced back to the departure of former IRS Commissioner Danny Werfel, who left his position on January 20, 2025, just one week before the official start of the tax season. Werfel’s early exit, reportedly influenced by the Trump administration, was an attempt to avoid a contentious transition. In a statement, Werfel expressed his confidence in the IRS team, stating, "The civil servant leaders and employees at the IRS are the exact right team to effectively steward this organization forward until a new IRS Commissioner is confirmed." Despite his optimism, Werfel’s departure set off a chain reaction, with O’Donnell stepping in as Acting Commissioner until his own eventual retirement.

Doug O’Donnell’s Brief Tenure and Retirement

Doug O’Donnell, who had previously served as Acting Commissioner from November 2022 through March 2023, took on the role once again following Werfel’s departure. His second stint, however, was short-lived, lasting just under a month before he announced his retirement. O’Donnell, a seasoned IRS veteran with over 38 years of service, expressed his deep care for the institution and confidence in Melanie Krause’s ability to lead during this transitional phase. His retirement marks the end of an era for a dedicated public servant who has held various leadership roles within the IRS, including Deputy Commissioner for Services and Enforcement and Commissioner of the Large Business and International (LB&I) Division.

Enter Melanie Krause: The New Acting Commissioner

With O’Donnell’s retirement, Melanie Krause, the IRS Chief Operating Officer, has assumed the role of Acting Commissioner. Krause, a relative newcomer to the IRS, joined the agency in October 2021 as the Chief Data & Analytics Officer. Her background is unique, with a blend of experience in data analytics, research, and even nursing. Before joining the IRS, Krause served as the Assistant Inspector General for Management and Administration with the Department of Veterans Affairs Office of Inspector General. Her educational credentials include bachelor’s, master’s, and doctoral degrees from the University of Wisconsin-Madison, and she maintains an active license as a registered nurse. Krause’s leadership during this critical period will be closely watched, especially as the IRS approaches the April tax deadline.

The Controversy Surrounding Billy Long’s Nomination

Amidst the leadership shuffle, President Trump’s nominee for IRS Commissioner, Billy Long, has drawn significant scrutiny. Long, a former U.S. Representative from Missouri’s 7th Congressional District, lacks formal training in tax, law, or accounting, and does not hold a college degree. Instead, his background is rooted in auctioneering, where he earned his Certified Auctioneer designation from the Missouri Auction School, which he affectionately refers to as the "Harvard of auctioneering schools." Long’s career shift to politics began in 2010, and he served in Congress until 2023. However, his nomination has sparked concerns, particularly among Democratic Senators, who have raised questions about his experience with tax matters, especially regarding the employee retention credit (ERC).

Senate Scrutiny and the Future of IRS Leadership

The Senate’s role in confirming the next IRS Commissioner adds another layer of complexity to this already volatile situation. Historically, the confirmation process for IRS Commissioners can be lengthy, with previous nominees waiting several months before facing the Senate. Danny Werfel, for instance, waited until February 2023 for his confirmation after being nominated in November 2022. The scrutiny surrounding Billy Long’s nomination has further complicated the timeline, with Senate Finance Committee Chair Ron Wyden (D-Ore.) and Sen. Catherine Cortez Masto (D-Nev.) seeking additional information about his role in promoting the ERC. As the IRS continues to navigate this leadership crisis, the ability of Melanie Krause and the agency’s leadership team to maintain stability and efficiency will be crucial, particularly as the nation approaches the April tax deadline. The coming weeks and months will undoubtedly shape the future of the IRS and its ability to fulfill its critical mission.