By Richard Rubin and Brian Schwartz

WASHINGTON -- The Trump administration is demoting the IRS's top lawyer, according to people familiar with the decision, and the move could make it easier for the tax agency to share its trove of confidential taxpayer data with others in the government.

William Paul, the acting chief counsel at the Internal Revenue Service, is expected to be replaced by Andrew De Mello, an IRS lawyer, the people said. De Mello was Trump's pick to be inspector general in the Education Department in his first term, though he was never confirmed by the Senate.

Paul, who isn't a political appointee, runs the Office of Chief Counsel, what is effectively an enormous tax law firm with the government as the client. Chief counsel lawyers represent the IRS in Tax Court, write regulations and guide IRS employees in complying with the law.

Paul had a long career in private practice before joining the government and took over as acting chief counsel after Marjorie Rollinson resigned at the end of the Biden administration. President Trump hasn't nominated a successor.

People tied to Elon Musk's Department of Government Efficiency have been working at the IRS for several weeks and have been interested in how they can use the tax agency's data. They have been trying to negotiate a broad data-sharing agreement. That data could, theoretically, be used for checking eligibility for federal benefits and for immigration enforcement.

But there are strict laws governing taxpayer privacy and data that limit how the IRS's information -- names, Social Security numbers, bank account data, income, etc. -- can be used outside of tax administration. Chief counsel lawyers have been very concerned about these recent requests and thought they weren't authorized by the law, according to a person familiar with the discussions.

Immigrants in the country illegally are required to file federal tax returns just like anyone who earns income, and many do so using taxpayer identification numbers provided by the IRS. In the past, the government's approach has been to encourage people to file tax returns and to not provide their information to immigration authorities.

Immigration advocates have sued the IRS, seeking to block the handover of any data. In a court filing late Wednesday, the government and the plaintiffs said they were discussing ways to prevent disclosure of data while the case is being litigated.

Paul didn't respond to an e-mail sent late Wednesday. A White House official declined to comment. An IRS spokesman didn't immediately comment.

Write to Richard Rubin at richard.rubin@wsj.com and Brian Schwartz at brian.schwartz@wsj.com

(END) Dow Jones Newswires

March 13, 2025 10:46 ET (14:46 GMT)

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