According to three persons familiar with the decision, the whistleblower who publicly testified regarding the IRS’s inquiries of Hunter Biden’s taxes has been fired, just days after being appointed to acting IRS commissioner.
The three people, who were not authorized to discuss the decision publicly, said that Deputy Treasury Secretary Michael Faulkender will take over for Gary Shapley, who previously testified before Congress while Republicans examined Joe Biden’s son’s financial transactions.
The fact that Faulkender will be the fourth IRS chief since President Donald Trump took office in January is indicative of the agency’s internal strife in the first few months of his second term.
Shapley’s brief stint coincides with a wave of senior personnel leaving the federal tax collecting agency due to a combination of demotions, layoffs, and resignations in response to Trump’s policy initiatives.
Elon Musk, a Trump adviser who has clashed with Cabinet officials in his position leading the Department of Government Efficiency, was the reason behind Shapley’s removal and subsequent replacement, according to Treasury Secretary Scott Bessent, who complained to Trump about Shapley’s appointment without his knowledge and at his request.
Musk reposted an X post late Thursday night from Laura Loomer, a far-right activist who has attacked several administration officials for not being faithful to Republican Donald Trump.
Bessent invited a “Trump hater” to collaborate with him on financial literacy initiatives, according to Loomer. Loomer added, “shame on” Bessent, “I am going to personally tell President Trump and personally show him these receipts.”
Musk said it was “troubling.”
In an emailed statement, Bessent stated that he is certain that Faulkender “is the right man for the moment” and that “trust must be brought back to the IRS.”
As we collaborate to rethink and improve the IRS, Shapley “remains among my most important senior advisors at the U.S. Treasury,” he continued.
According to two of the sources who were also aware of Shapley’s termination, the IRS has temporarily halted its reduction in force plan due to the most recent turmoil.
According to the persons, the tax collection agency’s abrupt leadership changes are to blame for the halt in layoffs.
The IRS started laying off employees earlier this month, which could result in the loss of up to 20,000 employees, or 25% of the whole workforce.
Shapley had been appointed to succeed Melanie Krause, who had resigned as acting IRS commissioner due to an agreement between the IRS and the Department of Homeland Security that allowed the IRS to provide immigration and customs enforcement with tax information about foreign nationals in order to assist in identifying and deporting those who were in the country illegally.
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In February, as controversy erupted over DOGE obtaining IRS taxpayer data, acting Commissioner Douglas O’Donnell announced his retirement from the agency after about 40 years of service. Krause had taken over as acting Commissioner.
The confirmation of former U.S. Representative Billy Long of Missouri, Trump’s choice to lead the IRS, is still pending.
