I.R.S. Head Is Ousted in Treasury Leader Bessent’s Struggle With Musk

Head of I.R.S. Is Ousted in Treasury’s Power Struggle With Elon Musk

Treasury Secretary Scott Bessent complained to President Trump that the acting commissioner had been installed without his knowledge.

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By Jonathan SwanAndrew DuehrenAlan Rappeport and Maggie Haberman

Reporting from Washington

President Trump has replaced the acting commissioner of the Internal Revenue Service after his appointment just days earlier set off a power struggle between Treasury Secretary Scott Bessent and the billionaire Elon Musk, five people with knowledge of the change said Friday.

Mr. Bessent’s deputy, Michael Faulkender, will be the new acting leader, replacing Gary Shapley, the Treasury Department confirmed on Friday. Mr. Faulkender will be the third acting leader of the agency this week.

Mr. Bessent had complained to Mr. Trump this week that Mr. Musk had done an end run around him to get Mr. Shapley installed as the interim head of the I.R.S., even though the tax collection agency reports to Mr. Bessent, the people familiar with the situation said. They spoke on the condition of anonymity to discuss private conversations.

The clash was the latest instance of Mr. Musk’s influence in the Trump administration that has alarmed top officials. It was also the latest upheaval at the tax agency, with much of its staff pushed out or quitting. Mr. Trump earlier this week called for the I.R.S. to revoke Harvard University’s tax-exempt status after the school refused to impose sweeping changes demanded by the administration.

An I.R.S. spokeswoman declined to comment on the leadership changes.

Mr. Shapley, a longtime I.R.S. agent, gained fame among conservatives after he claimed that the Justice Department had slow-walked its investigation into Hunter Biden’s taxes.

Mr. Musk’s Department of Government Efficiency pushed Mr. Shapley’s appointment through White House channels, but Mr. Bessent was not consulted or asked for his blessing, according to those with knowledge of the dynamic. Mr. Bessent then got Mr. Trump’s approval to unwind the decision within days, they said. Mr. Shapley had been working from the I.R.S. commissioner’s office as late as Friday morning.

“Trust must be brought back to the I.R.S., and I am fully confident that Deputy Secretary Michael Faulkender is the right man for the moment,” Mr. Bessent said in a statement Friday afternoon. The position of I.R.S. commissioner will be filled in an acting capacity while former Representative Billy Long awaits Senate approval for the role.

In his statement, Mr. Bessent praised Mr. Shapley for his “passion and thoughtfulness” and said that he remains an important adviser. Mr. Shapley and another I.R.S. critic of the Hunter Biden tax investigation, Joseph Ziegler, will be assigned to senior roles at the Treasury Department or the I.R.S.

Karoline Leavitt, the White House press secretary, did not address the details of the dispute, but said “it’s no secret President Trump has put together a team of people who are incredibly passionate about the issues impacting our country.”

“Disagreements are a normal part of any healthy policy process,” Ms. Leavitt said. “And ultimately everyone knows they serve at the pleasure of President Trump.”

Mr. Trump had picked Mr. Shapley to run the I.R.S. on Tuesday after the previous interim head, Melanie Krause, chose to resign. Ms. Krause quit after the Treasury Department agreed to use I.R.S. data to help Immigration and Customs Enforcement deport undocumented immigrants.

Treasury officials had hoped to persuade Ms. Krause, who had aligned with the administration on other issues, to stay in her job until at least May 15. While she had signed up for the administration’s deferred resignation program, Ms. Krause remained in the role until Mr. Musk forced the change on Tuesday and helped install Mr. Shapley.

The feud between Mr. Musk and Mr. Bessent went public late Thursday night, when Mr. Musk amplified a social media post from the far-right researcher Laura Loomer accusing Mr. Bessent of colluding with a “Trump hater.”

“Troubling,” Mr. Musk wrote about Mr. Bessent’s meeting John Hope Bryant, the chief executive of the nonprofit Operation HOPE. Mr. Bryant is working on a financial literacy effort with Treasury officials.

Ms. Loomer had called that meeting a “vetting failure.”

Ms. Loomer helped push out several officials from the National Security Council earlier this month, after first attacking some of them online and then meeting with Mr. Trump in the Oval Office and presenting him with a list of those she deemed disloyal.

Mr. Trump’s decision to side with Mr. Bessent in the dispute over the I.R.S. comes as Mr. Musk has been a less visible presence around Mr. Trump in recent weeks, and officials across the administration say he has been less of a headache than they had found him to be in the first several weeks of the second Trump presidency.

Mr. Musk’s moves to secure advisers in high-level posts across key agencies as part of his government-shrinking DOGE, and his methods to try to wrangle federal workers, have roiled some cabinet secretaries, even those who favor his overall goal of reform.

Mr. Trump still speaks warmly of Mr. Musk, and Mr. Trump’s advisers have taken note that the billionaire has said he wants to donate another $100 million through political entities controlled by the president’s team. But the president has also privately acknowledged that Mr. Musk has made missteps. Mr. Trump has said that he believes Mr. Musk will return to his private companies before too long. As a special government employee, Mr. Musk is allotted 130 days of time on the job. But if he works part time, he may be able to extend his time in government.

Mr. Musk, who has claimed to hold the record for paying the largest individual tax bill, has deployed several members of DOGE to the I.R.S. His team has pushed for steep staff cuts at the tax agency and canceled scores of contracts with outside technology vendors.

One of the DOGE members at the I.R.S., Gavin Kliger, was recently pushed out of the agency, according to three people familiar with the situation. The White House did not immediately respond to a request for comment on the matter.

Mr. Bessent is not the first Trump adviser whom Mr. Musk has attacked publicly. In the past two weeks, Mr. Musk used his social media site X to criticize Peter Navarro, a top Trump trade adviser who is a vocal proponent of tariffs. Mr. Musk, whose company Tesla will be harmed by the tariffs, has opposed the president’s policy.

Mr. Musk initially opposed Mr. Bessent becoming Treasury secretary and promoted the candidacy of Howard Lutnick, who detests Mr. Bessent and competed with him for the role. Mr. Lutnick ultimately became the commerce secretary.

Ahead of the Treasury selection, Mr. Musk posted on X that Mr. Bessent was the “business-as-usual choice” and that Mr. Lutnick would “actually enact change.”

Mr. Trump ultimately selected Mr. Bessent, and told advisers he thought Mr. Lutnick had tried to steer the transition process toward his own selection for the Treasury job, according to two people with direct knowledge of his comments.

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