WASHINGTON (AP) — Melanie Krause, the acting commissioner of the Internal Revenue Service (IRS), has announced her resignation following a contentious new agreement that permits Immigration and Customs Enforcement (ICE) to access taxpayer data to identify undocumented immigrants. This controversial deal was signed by Treasury Secretary Scott Bessent and Homeland Security Secretary Kristi Noem on Monday, allowing ICE to cross-verify tax records with names and addresses of individuals illegally residing in the U.S.

Krause, who has been at the helm of the IRS since February, will be the third senior leader to leave the agency in a tumultuous year, which has seen numerous significant departures since the start of 2025. Her resignation reflects widespread unrest among IRS employees regarding an apparent shift towards more collaborative operations with immigration enforcement, a move viewed by many as diverging from the agency's traditional mandate of protecting taxpayer confidentiality. Critics of the data-sharing agreement caution that it might erode public trust in the IRS and deter tax compliance, particularly within immigrant communities.

The recent organizational changes at the IRS include not only Krause's resignation but also the earlier exit of former Commissioner Douglas O’Donnell, who left after expressing concerns over similar data-sharing arrangements. Krause reportedly became increasingly uncomfortable with the direction the agency was taking under the current administration, especially after discovering the finalized terms of the agreement through media coverage rather than official channels.

The agreement raised alarms regarding the legality and ethical implications of sharing taxpayer information with law enforcement, contravening long-established IRS policies and federal privacy laws. Legal experts, including those from the NYU Tax Law Center, have warned that this could violate taxpayer rights and lead to potential legal repercussions for IRS officials involved in the implementation of this data-sharing policy.

Concerns surrounding the agreement were echoed by Tom Bowman, policy counsel for the Center for Democracy and Technology, who noted that the disclosure of immigrant tax records for immigration enforcement would likely discourage compliance among immigrant taxpayers and could place greater burdens on U.S. citizens.

As the IRS continues to navigate these increasing tensions and operational shifts, the agency has confirmed that it remains committed to protecting taxpayer information, even amid these pressing changes. According to spokespersons from the Treasury Department, Krause's leadership was marked by efforts to modernize the IRS and eliminate data silos that hinder the agency's efficiency.

For further details, please refer to the full report by SFGate and HuffPost.