On Friday, the IRS marked a significant turning point with the departure of two key directors, Seth Wilks and Raj Mukherjee, who were instrumental in guiding the agency’s initiatives related to cryptocurrencies. Their acceptance of deferred resignation offers, as directed by the Department of Government Efficiency (DOGE), underscores the ongoing challenges faced by federal institutions in adapting to the rapidly evolving landscape of digital assets.
Although Wilks and Mukherjee remain technically employed by the IRS for the next few months, they are currently on paid administrative leave. This situation reflects a broader trend initiated by President Donald Trump’s administration, which earlier in the year offered voluntary deferred resignations to various federal employees as part of an effort to streamline government operations.
Both directors brought a wealth of expertise to the IRS, having transitioned from prominent roles within the crypto industry. Wilks previously served as a vice president at TaxBit, and Mukherjee held positions at ConsenSys and Binance.US where he led tax initiatives. They joined the IRS Digital Asset Initiative in February 2024, tasked with developing innovative approaches to crypto taxation, which included spearheading efforts to enhance the agency’s reporting, compliance, and enforcement capabilities related to digital assets.
One of their notable contributions was the development of the updated 1099-DA tax form, released last summer, designed to assist U.S. taxpayers in accurately reporting digital asset transactions. Additionally, they oversaw drafting essential tax regulations aimed at providing clarity to the burgeoning crypto sector.
The IRS’s efforts included finalizing a significant rule that imposed data collection mandates on decentralized finance (DeFi) brokers, a measure enacted late in the previous administration. However, this rule faced substantial opposition and was ultimately rescinded by Congress under the Congressional Review Act earlier this year.
As executive director of digital asset strategy and development, Wilks played a pivotal role in shaping the IRS’s approach to emerging technologies, while Mukherjee, as executive director of the digital assets office, focused on aligning the agency’s operations with industry standards. Their departures raise questions about the future direction of the IRS’s crypto initiatives, particularly given that reports indicate more than 20,000 IRS employees have enrolled in the deferred resignation program, and many are expected to transition to paid administrative leave.
With anticipated staffing cuts looming, the IRS will need to consider how best to navigate these changes while continuing to meet the challenges posed by the rapidly evolving landscape of digital assets. The loss of Wilks and Mukherjee not only marks a shift in leadership but also heralds a period of uncertainty for the IRS’s relationship with the cryptocurrency sector.
