IRS turmoil: Leadership churn, worker exodus and threats to groups' tax-exempt status roil agency

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IRS turmoil: Leadership churn, worker exodus and threats to groups' tax-exempt status roil agency

2025-04-24 05:07 Last Updated At：05:11

WASHINGTON (AP) — The height of tax season was the height of turmoil at the IRS.

The agency shuffled through three acting directors over the course of a week. It’s preparing to lose tens of thousands of workers to layoffs and voluntary retirements. And President Donald Trump is weighing in on which nonprofits should lose their tax-exempt status, an incursion into the agency’s typically apolitical stance that threatens to further erode trust in federal institutions and weaponize enforcement efforts.

Just three months into Trump's second term, the government's fly-under-the-radar tax collector has become the latest platform for the Republican administration’s vision to cut and control the federal bureaucracy. Tax policy experts fear that taxpayer services and collection efforts will face prolonged delays as a result of the rapid changes.

The quick turnover in leadership and other changes are likely to dampen employee morale at the IRS and hurt the agency’s ability to serve taxpayers in a timely manner, says Janet Holtzblatt, a senior fellow at the Urban-Brookings Tax Policy Center.

“Leadership sets the tone, particularly in this environment,” she said.

Already, she notes, the agency has lost decades of institutional knowledge from nonpartisan career civil servants who have left over policy disagreements and layoffs.

The upheaval unfolded as Americans dutifully filed their taxes ahead of the April 15 deadline and as a legion of IRS employees undertook work to process returns and dole out refunds. The latest filing season data shows the agency accepted more than 117 million returns this tax season and issued $228.7 billion in refunds.

“We’re committed to improving the efficiency of the Internal Revenue Service," said the agency's newest acting commissioner, Michael Faulkender. "For the last 35 years, we’ve been five years away from the IRS being modernized. Under the direct leadership of Treasury, the modernization will be done in two years at a fraction of the cost.”

Meanwhile, the IRS, like other federal agencies, is hemorrhaging employees over cuts spearheaded by the Department of Government Efficiency, all while the agency churns through acting leaders as it awaits the installation of a permanent leader.

Douglas O'Donnell, the Trump administration's first acting IRS commissioner, announced his retirement in February as furor spread over DOGE gaining access to IRS taxpayer data. Melanie Krause, the second acting commissioner, resigned early this month over a deal between the IRS and the Department of Homeland Security to share immigrants’ tax data with Immigration and Customs Enforcement.

Gary Shapley, an IRS whistleblower who testified publicly about investigations into Hunter Biden’s taxes, was acting commissioner for a matter of days before being replaced by Faulkender, who was elevated just last week. The New York Times reported that Treasury Secretary Scott Bessent had complained to Trump that Shapley had been installed without his knowledge and at the behest of Trump adviser Elon Musk.

Trump's nominee for IRS commissioner, former U.S. Rep. Billy Long of Missouri, is still waiting for a confirmation hearing but faces controversies of his own. Most recently, Senate Democrats have called for a criminal investigation into Long's connections to alleged tax credit loopholes. The lawmakers allege that firms connected to Long duped investors into spending millions of dollars to purchase fake tax credits. Long did not respond to an Associated Press request for comment.

Among other concerns at the agency are fears that Trump will weaponize the IRS against his enemies — and reward his friends.

Some of the Democratic Party’s core political institutions, including fundraising platform ActBlue and the protest group Indivisible, are preparing for the possibility that the federal government may soon launch criminal investigations against them.

Trump said last week at the White House that the administration is looking at the tax-exempt status of Harvard University, which has defied the government's attempts to limit activism on campus, and environmental groups. He also mentioned the ethics watchdog organization Citizens for Responsibility and Ethics in Washington.

“It’s supposed to be a charitable organization,” Trump said of CREW. “The only charity they had is going after Donald Trump. So we’re looking at that. We’re looking at a lot of things.”

Jonathan S. Masur, an administrative law professor at the University of Chicago Law School, said it's unlawful for the president to unilaterally take away organizations' tax-exempt status.

“It's illegal for starters. The Supreme Court has established that that step is not allowed,” he said, adding that he anticipates that the court system will “very quickly block” any such move from the president.

The Trump administration is also watching out for allies of the president.

Treasury official David Eisner sent an email in March to a top IRS official regarding Mike Lindell, the founder of MyPillow and one of the chief proponents of the lie that the 2020 election was stolen from Trump.

“The ‘My Pillow guy’ and a high-profile friend of the President recently received an audit letter, from what I understand, his second in two years,” Eisner wrote in the email, which was viewed by the AP. The president “is concerned that he may have been inappropriately targeted," Eisner wrote. A Treasury spokesperson in an emailed statement said Eisner is a “dedicated public servant” who “acted appropriately with the expectation that this would be sent to the Inspector General.”

“Sharing relevant information with nonpartisan Inspectors General is designed to be an effective and confidential way to help ensure all Americans are treated fairly,” they added.

Among other changes in recent weeks are concerns about the IRS' engagement with the Department of Homeland Security over enforcing a new data-sharing agreement signed earlier this month by Bessent and Homeland Security Secretary Kristi Noem. The agreement will allow ICE to submit names and addresses of immigrants inside the U.S. illegally to the IRS for cross-verification against tax records.

The Treasury Department said the agreement is authorized by a statute that relates to criminal information sharing. However, that agreement is being litigated in federal court.

U.S. District Judge Dabney Friedrich will soon decide whether to refuse or grant a preliminary injunction in a lawsuit filed by nonprofit groups. The groups argue that immigrants in the country illegally who pay taxes are entitled to the same privacy protections as U.S. citizens and immigrants who are legally in the country.

The Treasury Department says the agreement will help carry out Trump’s agenda to secure U.S. borders and is part of his larger nationwide immigration crackdown, which has resulted in deportations, workplace raids and the use of an 18th-century wartime law to deport Venezuelan migrants.

Holtzblatt said the agreement is indicative of the turmoil at the IRS.

“There's an emphasis on improving technology and sharing information," but it's unclear for what reason, she said.

Israel intensifies attacks in Gaza and strikes ports in Yemen as Trump wraps up trip to region

2025-05-17 00:03 Last Updated At：00:10

DEIR AL-BALAH, Gaza Strip (AP) — Israel launched dozens of airstrikes across northern and southern Gaza on Friday, killing more than 93 people and wounding hundreds -- attacks that Israeli officials described as a prelude to a larger military campaign in the territory aimed at pressuring Hamas to release hostages.

Also on Friday, Israel struck two ports in Yemen that it said were used by the Houthi militant group to transfer weapons.

The strikes in Gaza followed days of similar attacks that killed more than 130 people, according to Gaza’s Health Ministry, and came as U.S. President Donald Trump wrapped up a visit to Gulf states — but not Israel.

There had been widespread hopes that his trip to the region could increase the chances of a ceasefire deal, or the resumption of humanitarian aid to Gaza, which Israel has prevented for more than two months.

Speaking to reporters in Abu Dhabi on the final day of his trip, Trump said he was looking to resolve a range of global crises, including Gaza. “We’re looking at Gaza,” he said. “And we’ve got to get that taken care of. A lot of people are starving. A lot of people are — there’s a lot of bad things going on.”

In southern Gaza, Israel struck the outskirts of Deir al-Balah and the city of Khan Younis. It said it hit anti-tank missile posts and military structures.

In northern Gaza, the attacks sent people fleeing from the Jabaliya refugee camp and the town of Beit Lahiya. Israel said it eliminated several militants who were operating in an observation compound.

Dark smoke was seen rising over Jabaliya as people grabbed what they could of their belongings and fled on donkey carts, by car and foot.

“We got out of the house with difficulty, killing and death, we did not take anything,” said Feisal Al-Attar, who was displaced from Beit Lahiya.

There were no immediate reports of casualties after the strikes on Yemen. The Houthis’ satellite channel Al-Masirah acknowledged the attacks, but provided no other details.

Israel’s military said it had intercepted several missiles fired from Yemen toward Israeli airspace during Trump’s trip.

Israeli Prime Minister Benjamin Netanyahu vowed earlier in the week to push ahead with a promised escalation of force in Israel’s war in the Gaza Strip to pursue his aim of destroying the Hamas militant group, which governs Gaza.

In comments released by Netanyahu’s office Tuesday, the prime minister said Israeli forces were days away from entering Gaza “with great strength to complete the mission ... It means destroying Hamas.”

An Israeli official said the strikes on Friday were preparatory actions in the lead-up to a larger operation and to send a message to Hamas that it will begin soon if there isn’t an agreement to release the 58 hostages still in Gaza since Hamas' October 2023 attack that launched the war. The official was not authorized to brief media and spoke on condition of anonymity

The same official said that Cabinet members were meeting Friday to assess negotiations in Qatar, where ceasefire talks are taking place, and to decide on next steps.

Israeli government spokesman David Mencer told The Associated Press on Friday that Israel’s military is intensifying its operations as it has done since Hamas stopped releasing hostages. “Our objective is to get them home and get Hamas to relinquish power,” he said.

In Israel, families of hostages said they awoke Friday with “heavy hearts” to reports of increased attacks and called on Netanyahu to “join hands” with Trump’s efforts to release hostages.

Edan Alexander, the Israeli-American hostage released Monday after backdoor U.S.-Hamas diplomacy, left the hospital Friday, according to a statement released by his parents, who said his recovery was far from over.

“Missing this historic opportunity for a deal to bring the hostages home would be a resounding failure that will be remembered in infamy forever,” the families said in a statement released by the hostage forum, which supports them.

The war began on Oct. 7, 2023, when Hamas-led militants killed 1,200 people and abducted 251 others during an attack on southern Israel. Israel’s retaliatory offensive has killed more than 53,000 Palestinians, many of them women and children, according to Gaza’s Health Ministry, which does not say how many were combatants.

Almost 3,000 have been killed since Israel broke a ceasefire on March 18, the ministry said.

Of the hostages that remain in Gaza, Israel believes as many as 23 are still alive, although Israeli authorities have expressed concern for the status of three of those.

Dozens of Palestinians in Khan Younis lined up at a charity kitchen to obtain food Friday in a scene that quickly turned chaotic as the enclave entered its third month of Israel’s aid blockade.

Several children behind a metal partition screamed and cried out for food. At one point, the scene descended into chaos as charity kitchen workers struggled to push people back into line.

Some workers were attacked as the crowd surged forward, pressing against the partition and lunging toward the large pots of rice to grab whatever they could. One child used his hand to scoop the last bits of rice from the nearly empty pot, while holding his food container with the other hand.

Israel's blockade is preventing food, fuel medicine and all other supplies from entering, worsening a humanitarian crisis. Israel says the blockade aims to pressure Hamas to release the hostages it still holds.

“Our only hope was that Donald Trump’s visit to the Middle East would result in solutions and somehow open crossings to bring in humanitarian assistance as soon as possible into the Gaza Strip, but the visit is almost over and not a drop of water or bread entered Gaza,” said Saqer Jamal, a displaced man from Rafah who was at the kitchen.

Earlier this week, a new humanitarian organization that has U.S. backing to take over aid delivery said it expects to begin operations before the end of the month — after what it describes as key agreements from Israeli officials.

A statement from the group, called the Gaza Humanitarian Foundation, identified several U.S. military veterans, former humanitarian coordinators and security contractors that it said would lead the delivery effort.

Many in the humanitarian community, including the U.N., said the system does not align with humanitarian principles and won't be able to meet the needs of Palestinians in Gaza and won't participate it.

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Mroue reported from Beirut. Associated Press writers Tia Goldenberg and Sam Mednick in Tel Aviv, Israel, contributed to this report.

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Follow AP’s war coverage at https://apnews.com/hub/israel-hamas-war