


WASHINGTON — The height of tax season was the height of turmoil at the IRS.
The agency shuffled through three acting directors over the course of a week. It’s preparing to lose tens of thousands of workers to layoffs and voluntary retirements. And President Donald Trump is weighing in on which nonprofits should lose their tax-exempt status, an incursion into the agency’s typically apolitical stance that threatens to further erode trust in federal institutions and weaponize enforcement efforts.
Just three months into Trump’s second term, the government’s fly-under-the-radar tax collector has become the latest platform for the Republican administration’s vision to cut and control the federal bureaucracy. Tax policy experts fear that taxpayer services and collection efforts will face prolonged delays as a result of the rapid changes.
The quick turnover in leadership and other changes are likely to dampen employee morale at the IRS and hurt the agency’s ability to serve taxpayers in a timely manner, says Janet Holtzblatt, a senior fellow at the Urban-Brookings Tax Policy Center.
“Leadership sets the tone, particularly in this environment,” she said.
Already, she notes, the agency has lost decades of institutional knowledge from nonpartisan career civil servants who have left over policy disagreements and layoffs.
The upheaval unfolded as Americans dutifully filed their taxes ahead of the April 15 deadline and as a legion of IRS employees undertook work to process returns and dole out refunds. The latest filing season data shows the agency accepted more than 117 million returns this tax season and issued $228.7 billion in refunds.
“We’re committed to improving the efficiency of the Internal Revenue Service,” said the agency’s newest acting commissioner, Michael Faulkender. “For the last 35 years, we’ve been five years away from the IRS being modernized. Under the direct leadership of Treasury, the modernization will be done in two years at a fraction of the cost.”
Meanwhile, the IRS, like other federal agencies, is hemorrhaging employees over cuts spearheaded by the Department of Government Efficiency, all while the agency churns through acting leaders as it awaits the installation of a permanent leader.
Douglas O’Donnell, the Trump administration’s first acting IRS commissioner, announced his retirement in February as furor spread over DOGE gaining access to IRS taxpayer data. Melanie Krause, the second acting commissioner, resigned early this month over a deal between the IRS and the Department of Homeland Security to share immigrants’ tax data with Immigration and Customs Enforcement.
Gary Shapley, an IRS whistleblower who testified publicly about investigations into Hunter Biden’s taxes, was acting commissioner for a matter of days before being replaced by Faulkender, who was elevated just last week. The New York Times reported that Treasury Secretary Scott Bessent had complained to Trump that Shapley had been installed without his knowledge and at the behest of Trump adviser Elon Musk.