Top IRS officials join chief in quitting following immigration data deal

By Nathan Layne and Kanishka Singh

(Reuters) -The acting head of the Internal Revenue Service and other top officials are quitting the tax-collecting agency after it struck a deal this week to share data with federal agents on migrants living illegally in the United States.

A U.S. Treasury spokesperson confirmed the resignation of commissioner Melanie Krause in a statement on Tuesday night. The agency's chief privacy, financial and risk officers are also resigning, according to two people familiar with the matter and posts made by the individuals on LinkedIn.

The leadership exodus underscores the disruption that has engulfed the agency since Elon Musk's Department of Government Efficiency began targeting it weeks ago, ordering it to slash thousands of jobs and provide it with access to taxpayer data.

Their departure also comes amid the busiest time of year for the IRS, with the filing deadline for most individual tax returns falling on April 15.

On Monday, the Treasury Department, the IRS and the Department of Homeland Security finalized an agreement under which taxpayer data will be provided to federal immigration authorities to help them locate migrants.

Officials with the Treasury Department, of which the IRS is a part, had largely bypassed Krause in recent days in forging the deal, which IRS attorneys warned likely violated privacy laws, the Washington Post reported.

"Melanie Krause has been leading the IRS through a time of extraordinary change," a Treasury spokesperson said in an emailed statement to Reuters, confirming her resignation.

Without mentioning the data agreement, the spokesperson added the agency was "in the midst of breaking down data silos that for too long have stood in the way of identifying waste, fraud, and abuse and bringing criminals to justice."

In addition to Krause, Kathleen Walters, the agency's chief privacy officer, Chief Financial Officer Teresa Hunter and Chief Risk Officer Mike Wetklow are also resigning. All three have posted on LinkedIn that they are looking for new jobs.

Krause and Wetklow declined to comment. Walters and Hunter could not be immediately reached.

Krause has opted to apply for a deferred resignation program, under which she could leave as early as April 28 and will be paid through September 30, according to a person briefed on her decision.

The person, who spoke on condition of anonymity, said Krause's decision to retire was triggered in part by concerns about the data-sharing deal.

The agreement also prompted Walters to quit, according to a person familiar with her thinking. Walters did not think there was a legal basis for sharing the taxpayer data with the Department of Homeland Security, the person said.

Reuters was not able to immediately determine why Hunter and Wetklow had quit.

The deal, signed by Treasury Secretary Scott Bessent and Homeland Security Secretary Kristi Noem, breaks with a longstanding IRS policy under which it encouraged immigrants to pay taxes even if they are not in the United States legally, assuring them that their data would be protected.

The IRS began making sweeping cuts to its workforce on Friday, gutting its civil rights office and implementing mass firings aimed at eliminating up to 25% of its workforce.

The cuts are part of a major overhaul of the federal workforce that has already cost more than 200,000 workers their jobs. President Donald Trump has tasked Musk with leading the reshaping and downsizing of the government.

(Reporting by Nathan Layne, Kanishka Singh and Costas Pitas; Editing by Chris Reese, Kim Coghill, Ross Colvin and Rod Nickel)