Elon Musk’s influence over the IRS has raised eyebrows in Washington after he reportedly orchestrated the installation of Gary Shapley as the interim head, bypassing Scott Bessent, the IRS’s direct supervisor. This unilateral move has created deep rifts within the agency. As a policy measure, it has drawn opposition from unusual political bedfellows, exposing the inherent tension between politics and tax enforcement.
The five anonymous sources with knowledge of the situation told us that Musk himself personally lobbied for Shapley’s appointment. In his corner, a group — within the White House — known as the “department of government efficiency” supported his push. Bessent was not asked about this move, which is what left him unhappy. In a stunning development, Bessent caught Donald Trump’s eye almost immediately. This gave him the power to overrule Shapley’s installation almost as soon as it was completed.
Musk, who now owns the social media platform X, has expressed his opposition to Bessent in extreme terms. He paid to promote an anti-Muslim post from Laura Loomer, a far-right conspiracy theorist. In her complaint, she alleged that Bessent works with individuals that she views as being anti-Trump. Loomer referred to businessman John Hope Bryant as a “pro-impeachment and pro-censorship Trump hater,” further complicating the relationship between Musk and Bessent.
“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.” – Karoline Leavitt
The IRS, which has faced much hand wringing from the Trump administration, has found itself in the middle of discussions around the tax-exempt status of Harvard’s revocation. This loaded topic has been exacerbated by claims that the administration is inappropriately coordinating IRS probes. That’s because federal law prohibits the president from telling the IRS which specific taxpayers to audit. It’s important that we appreciate this limit on presidential power.
Just last month, the IRS announced it would begin sharing tax information on undocumented immigrants with federal law enforcement agents. This controversial move led Melanie Krause to resign from her position inside the agency. This agreement has come under renewed fire for its implications for privacy and the due process clause.
Bessent was mad at Trump. He raised alarm over Shapley’s recent appointment, arguing that he was not consulted on the move. The developing saga suggests both an internal IRS power tussle and Elon Musk’s increasing clout in government affairs.
While these changes continue to traverse the legislative landscape, the future impact of such changes on IRS leadership and operations are unknown at this time. The convergence of disruptive forces like Musk and favorable Biden administration policies may well change the very nature of how federal agencies operate going forward.