The acting head of the IRS, Melanie Krause, is stepping down after opposing a new agreement to share tax data on illegal immigrants with federal law enforcement. Krause becomes the third IRS leader to leave since early this year amid internal turmoil linked to political divisions.

The IRS and Department of Homeland Security recently finalized the data-sharing deal, signed by Treasury Secretary Scott Bessent and DHS Secretary Kristi Noem, despite warnings it may violate privacy laws. Krause had been sidelined by Treasury officials aware of her opposition.

Krause’s predecessor also resigned over a similar dispute, and the last Senate-confirmed commissioner stepped down on President Trump’s first day.

Meanwhile, the IRS is undergoing significant workforce cuts, including dismantling its civil rights office, as part of a broader federal government overhaul led by Elon Musk’s Department of Government Efficiency (DOGE). Musk revealed the discovery of 14 “magic money computers” in agencies like Treasury and Defense, which create payments without proper oversight, potentially causing massive unaccounted federal spending.