The acting commissioner of the Internal Revenue Service is expected to announce on Tuesday that he is retiring, according to three people familiar with the move, the latest agency head to depart after Elon Musk’s team pushed for access to sensitive data and mass layoffs.
Doug O’Donnell, who has spent nearly 40 years at the I.R.S., took over the agency last month after the last commissioner stepped down at the beginning of President Trump’s term. Melanie Krause, the chief operating officer at the I.R.S., is expected to become the new acting leader after Mr. O’Donnell leaves on Friday, the people said on condition of anonymity because they were not authorized to speak publicly.
Mr. O’Donnell’s departure comes at a turbulent time for the I.R.S. Mr. Trump has targeted the tax collector, long a political villain for Republicans, for deep layoffs, with more than 6,700 employees dismissed last week. Mr. Musk has suggested the I.R.S. should be abolished and deployed a member of his so-called Department of Government Efficiency to the agency, with others expected to follow.
With roughly 100,000 staff members before the layoffs, the I.R.S. is responsible for collecting more than $5 trillion in revenue every year. Former President Joseph R. Biden Jr. had poured billions in new funding into the agency in hopes of modernizing its antiquated technology and beefing up its ability to go after companies and wealthy people who do not pay the taxes they owe.
Mr. Trump is rapidly reversing those efforts, in moves that tax experts warn could increase the deficit by making it easier for people to avoid paying taxes.
The I.R.S. is also in the middle of the annual filing season, its most work-intensive period, when millions of Americans submit their tax returns. Democrats have warned that the layoffs could create delays and errors for Americans waiting for their tax refunds. A Treasury Department spokeswoman did not respond to a request for comment.
In a break from the tradition of treating the leader of the I.R.S. as a nonpartisan management job, Mr. Trump has nominated Billy Long, a former Republican congressman, as the commissioner. Mr. Long supported legislation calling for the abolition of the I.R.S. while in Congress and after he left aggressively marketed a tax credit that the I.R.S. warned was a magnet for fraud. The Senate has not yet considered Mr. Long’s nomination.
Mr. O’Donnell had been considering retiring soon, even before Mr. Trump took office and began cutting thousands of jobs at the tax collector, two of the people familiar with his departure said.
I.R.S. officials last week had resisted efforts by Mr. Musk’s team to receive broad access to the agency’s data, which includes sensitive information about Americans’ earnings and families.
The agency ultimately outlined an agreement barring Gavin Kliger, a young software engineer affiliated with Mr. Musk’s team, from viewing individual taxpayers’ information while he works at the I.R.S.
