In a significant development for the Internal Revenue Service (IRS), Michael Faulkender, the deputy Treasury secretary, has been appointed as the acting director of the agency, effective Friday. This change in leadership marks the latest in a series of upheavals within the IRS, as the agency grapples with a turbulent environment characterized by multiple changes in command since the start of the tax season.

Secretary of the Treasury Scott Bessent announced Faulkender's appointment in a statement, emphasizing the need for restoring trust within the agency. Trust must be brought back to the IRS, and I am fully confident that Deputy Secretary Michael Faulkender is the right man for the moment, Bessent said. This decision comes on the heels of Gary Shapleys brief tenure as acting commissioner, which lasted only a few days. Shapley stepped in following the resignation of Melanie Krause, who left the position on Tuesday.

Bessent praised Shapleys dedication and insight, particularly highlighting his efforts in advocating for reforms at the IRS. Gary Shapley's passion and thoughtfulness for approaching ways by which to create durable and lasting reforms at the IRS is essential to our work, and he remains among my most important senior advisors at the US Treasury as we work together to rethink and reform the IRS, Bessent stated.

Shapley, who has gained prominence among conservatives due to his recent congressional testimony, alleged that the Justice Department had significantly delayed a criminal investigation concerning Hunter Biden. This testimony, delivered in July 2023 alongside fellow IRS whistleblower Joseph Ziegler, has positioned Shapley as a crucial figure in ongoing discussions about IRS reforms.

In his recent comments, Bessent highlighted that Shapley and Ziegler will embark on a yearlong investigation focused on IRS reforms. He promised that their findings will lead to substantial policy changes, ensuring that both will occupy important roles within the government once their investigation is complete.

The leadership shake-ups at the IRS have been frequent. Krause's recent resignation followed a controversial agreement between the IRS and the Department of Homeland Security. This agreement pertains to the sharing of sensitive tax information regarding undocumented immigrants, aimed at assisting the Trump administration in locating and deporting individuals. The details of this agreement were made public in April through a partially redacted document filed in a case that challenges the legality of such information sharing.

Krause had taken over the acting role after Doug O'Donnell resigned in February. O'Donnell had been serving as acting commissioner following the resignation of Danny Werfel, who was appointed by President Biden and left on Inauguration Day.

The political landscape surrounding the IRS is further complicated by Trump's nomination of former Republican Representative Billy Long for the commissioner role, a nomination that is currently pending Senate approval. As these leadership changes unfold, the IRS is also facing significant staffing reductions, which Business Insider has reported as part of an effort to increase efficiency and effectiveness within the agency. Notably, these cuts include a staggering 75% reduction in the IRS's Office of Civil Rights and Compliance.