There’s another shake-up at the nation’s tax agency. Weeks after the acting IRS Commissioner departed, another high-profile staffer is leaving. According to the Associated Press, acting chief counsel William Paul has been removed. He is expected to be replaced by Andrew De Mello.
Paul was reportedly demoted because he refused to cooperate with Elon Musk’s Department of Government Efficiency, as DOGE representatives allegedly sought to share taxpayer information with other federal agencies.
About Chief Counsel
The Chief Counsel, a position that dates back to 1866, is the chief legal advisor to the IRS Commissioner on all matters related to the interpretation, administration, and enforcement of tax laws and other legal issues. The Chief Counsel provides legal guidance and interpretive advice to the IRS, the Treasury, and taxpayers.
Under the IRS Restructuring and Reform Act of 1998, the Chief Counsel reports to the IRS Commissioner and the Treasury General Counsel.
Attorneys in the Chief Counsel’s Office serve as lawyers for the IRS. They provide the IRS and taxpayers with guidance on interpreting Federal tax laws correctly, represent the IRS in litigation, and provide all other legal support required to carry out the IRS mission. Before any cuts at the IRS, the Chief Counsel organization had approximately 2,600 employees.
According to the IRS Data Book, in the last fiscal year, the Chief Counsel received 54,979 cases and closed 65,603 cases. Most new cases (68.8% in fiscal year 2022) were from the Small Business/Self-Employed Division. More than 82.2% of new cases received and about 86.2% of cases closed were related to tax law enforcement and litigation, including Tax Court litigation; collection, bankruptcy, and summons advice and litigation; Appellate Court litigation; criminal tax; and enforcement advice and assistance.
The Chief Counsel also received 22,211 Tax Court cases involving a taxpayer contesting an IRS determination that they owed additional tax, and closed 34,907 cases involving $5.5 billion in disputed taxes and penalties.
Similar to the IRS Commissioner, the Chief Counsel is appointed by the President and requires Senate confirmation.
IRS Revolving Doors
Paul was named acting chief counsel to the IRS in January, replacing Marjorie A. Rollinson. Rollinson was sworn in on March 6, 2024, as the 49th IRS Chief Counsel. She was the first woman to permanently hold the top legal position at the nation’s tax agency (while the Chief Counsel position has had several women serve temporarily in an acting capacity, there had never been a woman formally confirmed by the Senate).
Before becoming Chief Counsel, Rollinson had retired from the firm Ernst & Young, where she served as the Deputy Director of the National Tax Department. She began her career at Ernst & Young in 1987 (known then as Ernst & Whinney), becoming a partner in 1997. In 2003, she became the Director of the International Tax Services National Tax Group, serving clients directly and leading the International Tax Technical Committee.
Her work at the IRS began in 2013 when she became Technical Deputy Associate Chief Counsel in the Office of the Associate Chief Counsel International, and she was named Associate Chief Counsel International in 2016. Rollinson announced her intention to retire last December after the presidential election. That wasn’t unexpected—the IRS Chief Counsel traditionally steps down during a new administration. However, the speed of Rollison’s departure and the nature of Paul’s demotion caught many by surprise.
Before Rollinson’s appointment, Paul had served as acting Chief Counsel since 2021. He has been at the IRS since the 1980s.
Chief Counsel isn’t the only office at the IRS experiencing turnover. The IRS is on its third Commissioner in just over a month. Secretary of the Treasury Scott Bessent announced that IRS Chief Operating Officer Melanie Krause will become acting IRS Commissioner following the retirement announcement of Doug O’Donnell.
O’Donnell had served as Acting Commissioner following former IRS Commissioner Danny Werfel’s departure on January 20, 2025 (one week before the tax season officially kicked off). His departure on February 28 marks a remarkable 39-day span of rotating Commissioners.
IRS Layoffs
High-profile departures aren’t the only ones making news. Last month, the IRS announced that it would cut thousands of workers on probationary status as part of ongoing efforts by the Trump administration to reduce costs. At least 3,500 IRS employees in the Small Business/Self-Employed (SB/SE) division of the IRS were expected to lose their jobs. The SB/SE division, currently headed up by Lia Colbert, serves more than 57 million small business owners and self-employed taxpayers—those with less than $10 million of assets. SB/SE employees may include those in the exam (audit) and collections departments and workers in operations support and fraud enforcement.
Approximately 7,000 probationary employees in the IRS were fired. While probationary employees are often recent hires (meaning within the last one to two years), they don’t have to be—those who have been serving for years but were recently moved or promoted into a new position also qualify as probationary.
(On Thursday, a U.S. District judge in California called the terminations of probationary employees unlawful and ordered their reinstatement. The order impacts all fired probationary employees from six federal agencies, including the U.S. Treasury.)
Additionally, reports suggest that the IRS will shortly make additional dramatic cuts to its workforce. The exact numbers (estimates are between 20% and 50%) and the timing of those cuts have not been confirmed.
Responses
In response to reporting that the acting chief counsel of the IRS has been removed, Tax Law Center Executive Director Chye-Ching Huang said, in a statement, “DOGE has been pressuring the IRS to get extraordinarily broad access to the confidential information of individual taxpayers, which the IRS has properly denied as unlawful — and now the Administration has removed the IRS’s top lawyer. If the Administration’s new appointee accedes to DOGE requests despite the law, taxpayers’ data and their rights will be at risk of large-scale breach and abuse.”
Huang continued, “IRS career staff are right to be concerned: officials who disclose taxpayer data outside the bounds of the law are exposed to potential criminal and civil liability. The series of IRS officials who have put the law above their personal job security join a line of public servants, stretching back to Treasury and IRS leaders during the Nixon era, who have resisted unlawful attempts by elected officials to weaponize taxpayer data and systems.”
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