Acting IRS commissioner steps down

Douglas O’Donnell, the acting IRS commissioner, told employees in an email Tuesday that he will step down from the position effective Friday.

Treasury Secretary Scott Bessent agreed with O’Donnell’s recommendation that Melanie Krause, the IRS’s COO, succeed him, O’Donnell said. Krause became the COO in April, having previously served as the agency’s chief data and analytics officer. A news release from Treasury said that Krause is serving as the acting commissioner and deputy commissioner.

O’Donnell, who first began work for the IRS in 1986, said he had expected to retire many times in the past but always found business reasons to continue. Now, he said, personal commitments to family and friends must take precedent.

“To all of you, I am grateful for your patience, support, and courage in the face of adversity,” he said. “I do not have concrete plans beyond being present for my family and close friends.”

O’Donnell’s retirement comes during tax-filing season, which opened Jan. 27. It also comes as thousands of IRS workers have lost jobs. A column Monday in The New York Times, written by seven former IRS commissioners, said about 6,700 agency workers were being laid off.

O’Donnell became acting commissioner in January, when previous Commissioner Danny Werfel, whose term was scheduled to end in 2027, resigned. O’Donnell previously served as acting commissioner from November 2022, when previous Commissioner Charles Rettig stepped down, until Werfel’s appointment in March 2023.

In addition to roles as acting commissioner, O’Donnell served as deputy commissioner for Services and Enforcement and as the commissioner of the IRS Large Business & International division for nearly six years.

— To comment on this article or to suggest an idea for another article, contact Martha Waggoner at Martha.Waggoner@aicpa-cima.com.