Acting head of IRS ousted amid Treasury’s power struggle with Musk

LEAH MILLIS / REUTERS / JULY 19, 2023

Gary Shapley, the acting commissioner of the IRS, is being replaced after Treasury Secretary Scott Bessent complained to President Donald Trump that Shapley was installed without his knowledge and at the behest of billionaire Elon Musk. Shapley, a former IRS whistleblower, is seen here testifying at a House committee hearing on Capitol Hill about alleged meddling in the Justice Department’s investigation of Hunter Biden in 2023.

WASHINGTON >> The acting commissioner of the IRS is being replaced after Treasury Secretary Scott Bessent complained to President Donald Trump that the latest leader of the agency had been installed without his knowledge and at the behest of billionaire Elon Musk, according to five people with knowledge of the change and the sensitive discussions that precipitated it.

Bessent believed that Musk had done an end run around him to get Gary Shapley installed as the interim head of the IRS, even though the tax collection agency reports to Bessent. Musk’s Department of Government Efficiency pushed the appointment through White House channels, but Bessent was not consulted or asked for his blessing, the people said. They spoke on condition of anonymity to discuss the private conversations.

Bessent got Trump’s approval to unwind the decision. The next acting head of the IRS, which has seen a conveyor belt of temporary leaders under Trump, is expected to be the deputy secretary of the Treasury, Michael Faulkender. He would hold the role until the president’s nominee for the permanent role, former Congress member Billy Long, if approved by the Senate, takes over.

Shapley, a longtime IRS agent, was lauded by conservatives after he publicly argued that the Justice Department had slow-walked its investigation into Hunter Biden’s taxes.

Trump picked Shapley on Tuesday to run the agency after the previous IRS interim head, Melanie Krause, decided to resign. Krause quit after the Treasury Department agreed to use IRS data to help Immigration and Customs Enforcement deport immigrants living in the country without legal permission. After telling colleagues on April 8 she would take the administration’s deferred resignation offer, Krause remained in the role until Musk forced the change Tuesday.

In a statement responding to The New York Times, Karoline Leavitt, the White House press secretary, did not address the details of the dispute.

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She 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, and ultimately, everyone knows they serve at the pleasure of President Trump.”

The IRS declined to comment.

The clash was the latest instance of Musk’s influence in the Trump administration alarming top officials, and has deepened the turmoil that has engulfed the IRS. The agency has been under pressure from Trump to revoke Harvard University’s tax-exempt status, an attempt to politicize the agency that has deeply troubled current and former officials.

Shapley was working from the IRS commissioner’s office this morning, according to two people familiar with the matter.

The feud between Musk and Bessent went public late Thursday night, when Musk elevated an attack from far-right researcher Laura Loomer questioning Bessent’s pro-Trump bona fides.

Musk amplified on X, the social media website he owns, a post from Loomer accusing Bessent of colluding with a “Trump hater” he had met with earlier this month. Loomer helped push out several officials from the National Security Council earlier this month, after meeting with Trump in the Oval Office.

“Troubling,” Musk wrote over her post about Bessent’s meeting, which she called a “vetting failure.” The person with whom Bessent met was John Hope Bryant, the CEO of the nonprofit Operation HOPE. Bryant is working on a broad financial literacy initiative with Treasury officials and is not a government employee, as her post suggested.

In a post on the social media platform Threads after his meeting with Bessent, Bryant said that he did not discuss politically fraught matters such as tariffs with the Treasury secretary and that he hoped that he would be a positive influence on the Trump administration.

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

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

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

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

This article originally appeared in The New York Times.

© 2025 The New York Times Company

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