In Washington, significant changes are underway at the Internal Revenue Service (IRS), as the recently appointed acting commissioner, who had previously given testimony regarding tax investigations involving Hunter Biden, has been dismissed. This decision, which three knowledgeable sources have confirmed, follows Gary Shapley’s brief tenure in the role. Shapley had previously testified before Congress amid Republican scrutiny of the business activities associated with Joe Biden’s son. Michael Faulkender, who currently serves as deputy treasury secretary, will fill Shapley’s position.
In what marks the fourth leadership shift for the IRS since the onset of President Donald Trump’s beginnings in office in January, Faulkender’s appointment occurs in a period of ongoing instability within the agency. This turbulence is characterized by a notable turnover of high-ranking officials, prompted by a combination of resignations linked to policy disagreements under Trump’s administration, as well as layoffs and demotions.
The change in leadership was initially reported by The New York Times. Their report suggested that the move arose after Treasury Secretary Scott Bessent voiced concerns to Trump. Bessent had argued that Shapley’s appointment was made without his awareness and was influenced by Trump advisor Elon Musk. Musk, known for his conflict with other Cabinet officials, is also involved in initiatives aiming to streamline government operations.
Tensions mounted when Musk shared a post by Laura Loomer, a far-right activist known for her critical views of certain government officials owing to their perceived lack of allegiance to Trump. Loomer accused Bessent of engaging someone hostile to Trump to collaborate on objectives related to financial literacy. Musk, by responding with the word “troubling,” signaled his discontent with the situation.
Subsequently, Bessent issued a statement via email emphasizing the necessity to restore trust within the IRS. He expressed his confidence in Faulkender’s capability to helm the agency at this critical juncture and also remarked that Shapley continues to play a significant advisory role within the U.S. Treasury, assisting with efforts to overhaul the IRS.
Following the recent developments, the IRS has opted to pause its planned reduction in workforce, as revealed by two sources familiar with Shapley’s dismissal. The decision to halt the layoffs, initially aimed at reducing up to 20,000 positions, reflects the ongoing instability in the leadership of the organization.
Shapley’s brief role as acting commissioner previously followed the resignation of Melanie Krause, who vacated her position in light of a controversial agreement to share tax data with immigration authorities with the objective of identifying individuals residing unlawfully in the United States. Krause had taken over from acting Commissioner Douglas O’Donnell, who retired after decades of service amid evolving concerns regarding security and privacy within the agency. Meanwhile, President Trump’s nominee for the IRS leadership, former U.S. Representative Billy Long of Missouri, awaits confirmation.