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Ken Kies, the Treasury Department’s top tax policy official, abruptly departed the federal government last week, leaving his roles as both assistant Treasury secretary and acting chief counsel of the IRS. Kies had been leading the implementation of last year’s tax law, the One Big Beautiful Bill Act (OBBBA).
Kevin Salinger, the deputy assistant Treasury secretary for tax policy, will take on both of Keis’s roles in an acting capacity. Tax attorney Jim Gadwood has been nominated for the permanent position as IRS chief counsel and is awaiting Senate confirmation.
Neither Kies nor the Treasury Department has commented on the reason for his sudden departure, but The Wall Street Journal reported that Kies clashed with administration officials over White House efforts to influence IRS audits and his approach to conservation easements.
Senate Minority Leader Chuck Schumer, D-N.Y., and 12 Democrats on the Senate Finance Committee sent a letter (PDF - 853.97KB) last week to Treasury’s inspector general for tax administration, asking for an investigation into the reason for Kies’s departure and into whether senior Trump administration officials violated the law prohibiting their interference in tax audits.
While Treasury has addressed many elements of the OBBBA in proposed regulations and guidance since last summer, there are still outstanding projects, including proposed regulations implementing changes to Section 250 for determining a U.S. corporation’s foreign-derived deduction-eligible income (FDDEI). Those regulations are intended to incorporate Notice 2025-78 and provide additional guidance on the allocation and apportionment rules applicable to FDDEI and are currently under review by the Office of Information and Regulatory Affairs (OIRA).
While Kies's departure is unlikely to derail OBBBA implementation, it does increase the risk of regulatory delays and reprioritization. Most routine guidance should continue moving forward under career staff and acting leadership, but more complex and policy-sensitive regulations could take longer or reflect different policy judgments than they would have under Kies.
Senate tax writers advance Treasury nominees
The Senate Finance Committee voted on party lines July 23 to support four nominations for Treasury Department roles. By votes of 14-13, the panel approved Francis Brooke to be deputy secretary, Erin Browne to be undersecretary for international affairs, Sriprakash Kothari to be assistant secretary for economic policy, and George McMaster to be assistant secretary for financial markets.
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