CNN —
Gary Shapley, whom President Donald Trump named acting commissioner of the Internal Revenue Service earlier this week, will no longer serve in the role, according to a White House official and a source briefed on the matter.
Michael Faulkender, the deputy secretary of the Treasury, will be taking on the position, the sources said.
The New York Times first reported Shapley’s ouster and his replacement.
CNN has requested comment from the IRS and its parent agency, the Treasury Department.
The move ends a whiplash week at the IRS. Trump signed the paperwork appointing Shapley on Tuesday, triggering panic among some career civil servants. The outgoing acting commissioner, Melanie Krause, announced Shapley’s elevation in an agency-wide email on Wednesday, according to three sources.
“I’ve made the decision to step down as acting commissioner and today is my last day in the office before I transition into a leave status,” Krause wrote. “I also have the privilege of sharing that President Trump has appointed Gary Shapley as the next acting commissioner.”
Two days later, Shapley was on his way out.
Shapley, a former IRS criminal investigator who alleged that the Justice Department slow-walked the investigation of Hunter Biden, had provided whistleblower testimony to Congress as Republicans claimed partisan bias by Justice officials had hindered the investigation of the son of President Joe Biden. Republicans had celebrated his return to the IRS.
Including Shapley’s short-lived tenure, Faulkender will be the fifth person to lead the beleaguered tax-collection agency this year. Krause had decided to resign last week after the Trump allies pushed through a controversial deal to share taxpayer data with immigration agencies.
Trump’s pick for full-time commissioner – former Missouri Rep. Billy Long – awaits confirmation in the GOP-led Senate.
During Trump’s first term, Faulkender worked at the Treasury Department as assistant secretary for economic policy. He was confirmed in March by the Senate, in a 53-43 party line vote, to be the deputy secretary under Secretary Scott Bessent during Trump’s second term.
Faulkender’s responses to written questions from senators shed light on his philosophy surrounding the IRS’ top priorities. On March 6, he wrote that the agency should “enforce the tax code in an even-handed manner” and raised concerns about “overly aggressive and poorly targeted audits that burden ordinary taxpayers and small businesses.”
He also offered reassurances to Democratic concerns that Trump might pressure the IRS to do his political bidding, including that he might order audits of perceived enemies.
“If confirmed, I will support the fair and impartial implementation of our nation’s tax laws, including the important safeguards against improper interference with taxpayer audits and investigations,” Faulkender said, later adding, “I will comply with all relevant laws.”
He pledged to protect taxpayer privacy and said the Treasury Department “will comply with” court orders restricting the Department of Government Efficiency from accessing highly sensitive IRS databases. Some of those limitations on Elon Musk’s team have since been relaxed while legal cases play out.
“The protection of tax returns and tax return information is essential to maintaining taxpayers’ confidence in the IRS and the tax system more generally,” Faulkender wrote. “I am absolutely committed to upholding taxpayer privacy rights… if confirmed, I will ensure that any access is in compliance with the statutory protections found in the tax code.”
This is a developing story and will be updated.
