IRS chief counsel bumped for DOGE ally

Andrew Harrer/Bloomberg

The Internal Revenue Service's acting chief counsel, William Paul, has been reportedly removed from his role at the agency and replaced by Andrew De Mello, an attorney in the chief counsel's office who is deemed supportive of Elon Musk's Department of Government Efficiency.

News reports said Paul, who had a long history with the IRS and was named acting chief counsel two months ago, was demoted because he clashed with the DOGE's alleged push to share tax information with multiple agencies.

This as DOGE moves ahead with plans to cut tens of thousands of employees from the IRS in the middle of tax season, citing savings for the federal government, as well as a hunt for fraud and abuse. Some 7,000 probationary IRS employees with roughly one year or less of service have been laid off from the agency; as much as half of the 90,000 in the IRS workforce could be let go.

The Washington Post has reported that checking federal benefits spending against tax records could help Musk's team pinpoint duplicative or erroneous payments.

An immigration angle

A recent lawsuit filed in the U.S. District for D.C., says the reason for the demotion has more to do with the Trump administration's immigrant crackdown.

Centro de Trabajadores Unidos and Immigrant Solidarity Dupage, two Illinois-based nonprofits that deal with advocacy for the immigrant and Latino communities, filed the lawsuit against Treasury Secretary Scott Bessent, the IRS and it's acting commissioner, Melanie Krauss, to prevent the agency from unlawfully disclosing return information to immigration enforcement authorities.

"Congress enacted taxpayer privacy laws in response to the Nixon administration's abuse of the IRS tax records for political purposes," Nandan Joshi, co-counsel for the plaintiffs, said in a statement.

"The Trump administration is setting a dangerous precedent that puts every taxpayer at risk," added co-counsel Kevin Herrera. "The IRS should never be commandeered as a tool for surveillance and immigration enforcement."

The suit claims that IRC Subsection (g) of Sec. 6103 authorizes the president to obtain return and return information via signed, written request that identifies the taxpayer's name and address. "It does not authorize the president to obtain returns or return information in bulk for purposes of identifying targets for immigration enforcement," the suit reads.

Although Sec. 6103 includes no language authorizing disclosure of return and return information for immigration enforcement, it does authorize such disclosure for certain criminal investigations, the suit claims. But "the administration has incorrectly characterized all individuals not authorized to remain in the U.S. as criminals," circumventing 6103's narrow exceptions to confidentiality of tax records — "the largest source of the names and current addresses of non-citizens within the federal government."

Under the leadership of its previous acting commissioner, Douglas O'Donnell — who retired approximately a month after taking on the role — the IRS had refused to provide the requested information, the suit says, adding, "The statements and activities of the Trump administration have made clear their intention to use mass collection of taxpayer information to advance civil immigration enforcement, in contravention of the plain language of the Tax Code."