Secretary of the Treasury Scott Bessent announced on Feb. 25 that IRS Chief Operating Officer Melanie Krause will become acting IRS Commissioner after the retirement announcement of Doug O’Donnell.
O’Donnell, IRS deputy commissioner who has been serving as the agency’s acting Commissioner since January, intends to retire on Feb. 28. He spent over 38 years at the IRS in different roles. Aside from his current position as acting commissioner, he also served in the role from November 2022 through March 2023.
O'Donnell became acting commissioner in January after the resignation of Danny Werfel, who was selected by ex- President Joe Biden and left the post on President Donald Trump's inauguration day.
With O'Donnell's departure, Krause will move into the deputy commissioner role and serve as the acting commissioner of the IRS.
“On behalf of the Treasury Department, I want to thank Doug O’Donnell for his decades of public service and dedication to the nation’s taxpayers,” Bessent said. “He has been a remarkable public servant, and I wish him the best in retirement. At the same time, Melanie Krause and the agency’s leadership team are well positioned to serve during this critical period for the nation in advance of the April tax deadline.”
“The IRS has been my professional home for 38 years,” O’Donnell noted. “I care deeply about the institution and its people and am confident that Melanie will be an outstanding steward of the Service until a new Commissioner is confirmed.”
Krause has been the IRS chief operating officer since April 2024 after acting as deputy commissioner of operations support since January of the same year. As chief operating officer, Krause oversees the operations such as the chief financial officer and chief risk office, among other of the agency's positions and units.
Krause started her IRS career in October 2021 as the chief data & analytics officer. In this role, aside from leading the RAAS team, Krause also coordinated research activities such as utilizing AI and other advanced analytics. Krause was also acting deputy commissioner for services and enforcement from November 2022 to March 2023. Before joining the IRS, Krause spent 12 years in the federal oversight community such as the Government Accountability Office and the Department of Veterans Affairs Office of Inspector General.
According to the The Wall Street Journal, Trump has picked Billy Long, an ex-Republican House member from Missouri, to head the IRS for the rest of Werfel’s term, which ends in November 2027. However, Long has not had his Senate confirmation hearing yet, which means Krause, who has been chief operating officer, will potentially run the IRS for most of the individual income tax-filing season ending mid-April.
The Journal reported that Trump and congressional Republicans have been attempting to reverse the IRS expansion that began back in 2022 under the Biden administration, when the Democratic Congress gave it $80 billion to expand enforcement, improve service and revamp old technology. The Trump administration's first month in office has seen major changes to the agency and O’Donnell’s retiring creates more disruption.
As reported by The Trusted Professional on Feb. 21, the IRS has started laying off thousands of probationary employees, a move that is expected to significantly impact the agency’s operations during tax season. Roughly 7,000 workers—about 7% of the IRS workforce—are losing their jobs, with 5,000 of the cuts coming from enforcement and collections.
The Journal said that O’Donnell had been wanting to retire earlier and Treasury officials had asked him to postpone leaving until now, individuals familiar with the matter noted. He held different jobs during his career at the agency, overseeing the large business division and working as deputy commissioner aside from his previous stint as acting commissioner.