President Donald Trump is replacing the fourth IRS chief this year amid complaints by Treasury Secretary Scott Bessent that he was not consulted on the appointment after Elon Musk recommended the person, according to a White House ally and a Trump administration official familiar with the dispute who were granted anonymity to discuss private conversations.
Bessent also ousted a prominent member of Musk’s DOGE team assigned to the IRS, after a major staff reduction was set in motion at the agency.
Gary Shapley, an IRS criminal investigator and whistleblower in the Hunter Biden tax case, was tapped by Trump only days ago to temporarily lead the agency.
However, according to the people familiar with the situation, Shapley was installed largely at the request of billionaire Musk, and Bessent was left completely in the dark about the decision.
Bessent expressed his frustration outside the Oval Office on Thursday and made it clear he wanted someone he could trust to lead the IRS, according to the administration official.
The Department of Government Efficiency staffer fired by Bessent is Gavin Kliger, who had set up shop at the IRS to make drastic cuts to the agency, the official said.
The new acting head of the IRS will be Michael Faulkender, the current deputy secretary for the Treasury Department, according to the White House ally.
The situation was first reported by The New York Times.
Bessent named Shapley a special adviser to the department in March, following his allegations that the Biden administration interfered in a probe of tax evasion by Hunter Biden. Bessent said in a statement Friday that Shapley “remains among my most important senior advisors at the U.S. Treasury as we work together to rethink and reform the IRS.”
He added that after Shapley and fellow whistleblower Joseph Ziegler finish a yearlong investigation of the Hunter Biden matter, “I will ensure they are both in senior government roles that will enable the results of their investigation to translate into meaningful policy changes.”
“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.
The incident illustrates increased friction between officials in Trump’s Cabinet and Musk, who is at times perceived to be bypassing their authority. It also comes as the White House is moving to implement huge layoffs at the IRS that could reduce its workforce by as much as 40 percent.
According to the administration official, Bessent wasn’t completely comfortable with the fast pace and scope of the reduction in force plans, which give employees 60-days notice before they are laid off from a federal agency. Bessent primarily wanted to cut IT contracts.
Shapley’s departure follows the exit of the last acting IRS commissioner, Melanie Krause, who resigned after an agreement was inked between the Homeland Security Department and the IRS to share data on undocumented immigrants.
Faulkender will be the fifth head of the agency after IRS Commissioner Danny Werfel left the post in January.
Trump’s pick for commissioner, former Rep. Billy Long (R-Mo.), has been mired in controversies pertaining to tax credits he hawked in the private sector. Long also recently paid off a $130,000 personal campaign loan for his failed Senate bid using contributions from donors affiliated with the tax consultancy industry.
Long has yet to have a confirmation hearing in the Senate.
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