IRS Head Resigns Over ICE Collaboration

IRS Acting Chief Resigns Amid Immigration Data Controversy

Melanie Krause, who has served as acting commissioner of the Internal Revenue Service (IRS) since February, is reportedly stepping down over a controversial new agreement that enables Immigration and Customs Enforcement (ICE) to access IRS tax records to locate individuals in the country illegally. 
According to two individuals familiar with the matter, Krause's resignation stems from her objection to the data-sharing arrangement signed Monday, April 7, by Treasury Secretary Scott Bessent and Homeland Security Secretary Kristi Noem.
The new policy permits ICE to submit names and addresses of suspected undocumented immigrants to the IRS for verification against tax records. These sources, who spoke anonymously to the Associated Press, said the decision had not yet been publicly acknowledged.
Read on to get all the unfolding details. 
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Turmoil Inside the IRS?

Melanie Krause is the latest in a string of high-profile departures from the IRS. 
Former Acting Commissioner Douglas O'Donnell retired in February amid controversy over Elon Musk's Department of Government Efficiency (DOGE) gaining access to confidential tax data. 
In another move, Acting Chief Counsel William Paul was replaced last month by Andrew De Mello, who is said to support DOGE's directives, according to sources who were not authorized to speak publicly.
The Treasury Department has defended the new IRS-DHS agreement, describing it as part of President Donald Trump's larger immigration strategy. According to an official from the department, the agreement stems from "longstanding authorities granted by Congress, which serve to protect the privacy of law-abiding Americans while streamlining the ability to pursue criminals."

Advocates and Experts Warn of Legal and Privacy Implications

The agreement prompted strong pushback from privacy advocates and legal scholars. Critics argue that the deal could undermine tax compliance and set a dangerous precedent for how sensitive information is used by federal agencies.
Tom Bowman of the Center for Democracy and Technology stated that revealing immigrant tax records "will discourage tax compliance among immigrant communities, weaken contributions to essential public programs, and increase burdens for U.S. citizens and nonimmigrant taxpayers."
He concluded, "It also sets a dangerous precedent for data privacy abuse in other federal programs."
Legal experts at NYU's Tax Law Center echoed those concerns, writing in a memo that the agreement "threatens to violate the rights that many more Americans have under longstanding laws that protect their tax information from wrongful disclosure or dissemination."

ICE and DHS Defend the Agreement's Enforcement Purpose

Federal immigration officials have maintained that the data-sharing arrangement is intended for use in serious criminal investigations. 
At a Border Security Expo in Phoenix, Arizona, acting ICE Director Todd Lyons addressed the issue, saying the effort would target individuals "kind of hiding in plain sight" while using false identities and collecting unauthorized benefits.
The memo outlining the deal insists that both the IRS and ICE "will perform their duties in a manner that recognizes and enhances individuals' right of privacy and will ensure their activities are consistent with laws, regulations and good administrative practices."

Political Backdrop and Funding Disputes Add to Tensions

The agreement was preceded by a February letter from Kristi Noem to Scott Bessent requesting that IRS Criminal Investigation personnel be loaned to assist in immigration enforcement. The letter cited increased IRS funding from the Inflation Reduction Act, although a significant portion of that $80 billion allocation has since been rescinded.
The NYU Tax Law Center noted the legal risks involved for IRS officials who comply with the new agreement: "IRS officials who sign off on data sharing under these circumstances risk breaking the law, which could result in criminal and civil sanctions," they said.
As the IRS continues to face both internal and external pressures, Melanie Krause's resignation seems to highlight broader concerns about the agency's independence and the potential erosion of taxpayer privacy in the name of national security.