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 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 clash was the latest instance of Mr. Musk’s influence in the Trump administration alarming top officials. The feud between Mr. Musk and Mr. Bessent went public late Thursday night, when Mr. Musk elevated an attack from the far-right researcher Laura Loomer questioning Mr. Bessent’s pro-Trump bona fides.
Mr. Shapley, a longtime I.R.S. agent, gained fame among conservatives after he publicly argued 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, the people with knowledge of the situation said. They spoke on condition of anonymity to discuss private conversations.
Mr. Bessent got Mr. Trump’s approval to unwind the decision within days of it being made, the people said.
“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.
Mr. Bessent said that Mr. Shapley remains an important adviser and that he 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.
In a statement, Karoline Leavitt, the White House press secretary, did not address the details of the dispute.
“It’s no secret President Trump has put together a team of people who are incredibly passionate about the issues impacting our country,” she said. “Disagreements are a normal part of any healthy policy process, and ultimately everyone knows they serve at the pleasure of President Trump.”
The position of I.R.S. leader will be filled in an acting capacity until former Representative Billy Long, if approved by the Senate, takes over.
Mr. Trump had picked Mr. Shapley on Tuesday to run the I.R.S. after the previous interim head, Melanie Krause, decided 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.
Mr. Shapley was working from the I.R.S. commissioner’s office as of Friday morning, according to two people familiar with the matter.
Jonathan Swan is a White House reporter for The Times, covering the administration of Donald J. Trump.
Andrew Duehren covers tax policy for The Times from Washington.
Alan Rappeport is an economic policy reporter for The Times, based in Washington. He covers the Treasury Department and writes about taxes, trade and fiscal matters.
Maggie Haberman is a White House correspondent for The Times, reporting on President Trump.
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