The revolving door of acting IRS leaders continues to spin. Gary Shapley, who replaced former acting commissioner Melanie Krause, was replaced after just three days on the job. Michael Faulkender, deputy secretary of the Treasury, will take his seat, becoming the fifth person to lead the IRS since January (and the third in the space of a week).

Shapley was appointed to lead the IRS last Tuesday via a memo from President Donald Trump. His installation was heavily influenced by Elon Musk, sources told the New York Times. Treasury Secretary Scott Bessent objected to Shapley’s installation, which he said occurred without his permission. He persuaded Trump to reverse the decision and appoint Faulkender instead.

The rapid-fire changes reflect tensions between Bessent and Musk. A source told Politico that Bessent is opposed to Musk’s plans to drastically reduce the size of the IRS workforce, and that he was mainly interested in cutting IT contracts. Bessent has fired DOGE staffer Gavin Kliger, who was planning on making deep cuts to IRS staff.

“You can’t make this stuff up,” former IRS Commissioner John Koskinen told the Wall Street Journal. “The continual changes at the top of the IRS, along with the loss of thousands of experienced employees, means that the agency will be challenged to provide efficient service to taxpayers and to collect all the taxes owed.”

Click here for more on the IRS merry-go-round.—CV

For the tech giants building out the next generation of AI, 2025 was already going to be an expensive year. President Trump’s tariffs might balloon those price tags further—but how much remains unclear.

Microsoft, Google, Meta, and other big AI companies have pledged to spend hundreds of billions of dollars on AI infrastructure projects this year. Much of that infrastructure consists of data centers—containing Nvidia chips, computer parts, cooling and power equipment, and other components—all of which could see various impacts from tariffs.

Where the chips fall: Right now, semiconductors are exempt from reciprocal tariffs, though the administration embarked on a probe this week to assess levying them in the coming weeks or months. Trump has also exempted certain electronics, including computer parts, a move Commerce Secretary Howard Lutnick told ABC News is temporary.

Nvidia, the biggest supplier of AI chips, is shielded from some tariff impact because it assembles many of its imported semiconductors into graphic processing units (GPUs) in Mexico and Canada, also currently exempt from tariffs through the United States-Mexico-Canada trade agreement, a report from analysts at Bloomberg Intelligence said.

Click here to read Tech Brew’s story on how tariffs may impact AI costs.—PK

The IRS, acting under direction from the Trump administration, will cut from 30% to 40% of its workforce, according to an internal memo seen by CBS News and the Federal News Network. The agency has plans to go from 102,000 employees to a target of 60,000 to 70,000, the memo said.

The layoffs will come in two phases, the memo said. The first will make “high” numbers of cuts to “core functions” such as the online services office, taxpayer experience office, transformation strategy office, and office of civil rights. The second phase, which will take place in August, will “consolidate” many functions and make “high” numbers of cuts to taxpayer services and compliance. Cuts to career executive jobs will take place between the two phases.

The reduction in force is well underway. More than 20,000 IRS employees have taken the deferred resignation offer, the New York Times and Bloomberg Tax reported. They’ll be off the job as early as April 28.

IRS ROI: The IRS increased in size by about 26,000 employees under President Joe Biden’s tenure. It employed around 75,700 people in full-time equivalent positions in 2020, and hired many new staffers with $78.9 billion in funding it received through the Inflation Reduction Act. (Congressional Republicans rescinded $40 billion of that money.) The reduction in force would reverse those changes and then some.

An unnamed spokesperson for the Treasury wrote, regarding the reduction in force, that “the roll back of wasteful Biden-era hiring surges, and consolidation of critical support functions are vital to improve both efficiency and quality of service.”

National Taxpayer Advocate Erin Collins, however, argued in her annual report to Congress that the Biden-era hires made the agency more effective.

Yes, there is even more chaos at the IRS to continue reading about here.—CV