Who is Melanie Krause? IRS chief walks out after immigrant data firestorm

Acting Internal Revenue Service Commissioner Melanie Krause submitted her resignation on Tuesday, deepening a leadership crisis within the agency. Her departure comes on the heels of the IRS finalizing a contentious agreement with the Department of Homeland Security (DHS), which would allow immigration authorities access to taxpayer information.
According to sources with knowledge of the internal dynamics — including two current IRS employees and a former staffer — Krause’s exit reflects growing unrest inside the agency. Many within the IRS are reportedly uncomfortable with the direction the agency is heading, particularly concerning the data-sharing arrangement with DHS.
The agreement, recently signed, is intended to assist the Trump administration in identifying and deporting undocumented immigrants. But a source familiar with the matter said Krause had only reviewed an earlier version of the agreement and was "unaware of the final terms of the agreement until she saw media reports."
Her surprise at the finalized document reportedly played a major role in her decision to leave, the source added. The development comes as internal dissent builds within the IRS over both the legality and ethics of the deal.
In addition to Krause’s concerns, several other senior IRS officials are also rumored to be considering stepping down. "A broader wave of resignations by senior IRS officials," one source said, combined with unresolved disagreements, ultimately led Krause to conclude that stepping away was the right choice.
Krause had served at the IRS for over three years and took on the role of acting commissioner during a period of organizational turbulence. Her resignation marks the third significant leadership change at the agency this year.

Krause initially joined the IRS a little over three years ago and took the helm after Doug O’Donnell, her predecessor, retired. O’Donnell reportedly refused to sign off on a controversial agreement involving data-sharing with the Department of Homeland Security before his departure earlier this year, which is believed to have contributed to ongoing tensions at the agency.
Krause assumed leadership at a time when the IRS was already navigating significant internal upheaval. Her tenure coincided with growing discord among agency officials over increased collaboration with immigration enforcement efforts and broader institutional changes.
In a public statement, the Treasury Department expressed appreciation for her service. “Melanie Krause has been leading the IRS through a time of extraordinary change. As we focus on IT modernization and re-organize the agency to better serve the taxpayer, we are also in the midst of breaking down data silos... We wish Melanie well on her next endeavor.”
The shakeup at the top began earlier this year with the resignation of Danny Werfel, who had been appointed IRS commissioner by President Biden and left the role on Inauguration Day. With Krause and O’Donnell both exiting since then, the agency is facing a serious leadership vacuum.
According to individuals familiar with internal conversations, proposals are being floated to reassign IRS criminal investigators to assist with immigration cases. Some reports also suggest that the IRS Criminal Investigations division could be restructured under the broader Treasury Department umbrella — a move that is raising eyebrows within the agency.
As questions swirl around the IRS’s future direction and its involvement in immigration enforcement, Krause’s departure highlights deepening instability within one of the federal government’s most critical institutions.