By Richard Rubin

WASHINGTON -- Acting IRS Commissioner Douglas O'Donnell plans to announce his retirement on Tuesday, said two people familiar with the decision, bringing another abrupt change to a federal agency under stress during its busy period of the year.

O'Donnell is a career civil servant who has worked at the Internal Revenue Service for 38 years. He became acting commissioner last month following the resignation of Danny Werfel, who had been picked by former President Joe Biden and left on Inauguration Day.

O'Donnell's last day will be Friday, and he is expected to be succeeded as acting commissioner by Melanie Krause, one of the people said. President Trump has picked Billy Long, a former Republican House member from Missouri, to run the tax agency for the remainder of Werfel's term, which ends in November 2027.

Long hasn't had his Senate confirmation hearing yet. That means Krause, who has been chief operating officer, is likely to run the IRS for much of the individual income tax-filing season that ends in mid-April.

O'Donnell's decision was reported earlier Monday evening by the website Talking Points Memo.

Trump and congressional Republicans have been trying to reverse the IRS expansion that started in 2022 under Biden, when the Democratic Congress gave the agency $80 billion to expand enforcement, improve service and overhaul aging technology.

The first month of the Trump administration has brought some significant changes to the IRS, and O'Donnell's departure adds more upheaval and uncertainty.

Last week, the IRS fired more than 6,000 probationary employees from its 100,000-person workforce as part of Trump's governmentwide staff reductions. And the IRS reached an agreement that allowed officials with Elon Musk's Department of Government Efficiency to have limited access to anonymized taxpayer data.

O'Donnell had been planning to retire earlier and Treasury officials had urged him to delay his departure until now, one of the people said. He held a variety of jobs during his IRS career, overseeing the large business division and working as deputy commissioner in addition to an earlier stint as acting commissioner.

Write to Richard Rubin at richard.rubin@wsj.com

(END) Dow Jones Newswires

February 24, 2025 23:08 ET (04:08 GMT)

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