By: John S. Morlu II, CPA
The Internal Revenue Service (IRS) has quietly undergone a significant leadership shakeup that could have far-reaching implications for tax-exempt organizations, government bodies, retirement plans, and tribal governments across the United States.
In late March 2025, Edward Killen, the former commissioner of the IRS’s Tax Exempt and Government Entities (TE/GE) Division, was promoted to serve as the agency’s acting Chief Taxpayer Compliance Officer. This appointment came following the resignation of long-serving compliance leader Heather Maloy, who stepped down effective March 21.
Stepping into Killen’s former position is Robert Choi, a longtime IRS veteran who is now the acting Commissioner of the TE/GE Division. This transition marks a pivotal moment for IRS oversight of the nonprofit sector and public-sector tax compliance — a space already under increased scrutiny in recent years.
Why This Matters: TE/GE Is the IRS’s Nonprofit Watchdog
The TE/GE Division is the nerve center of IRS oversight for:
- Tax-exempt organizations (including 501(c)(3) nonprofits, social welfare orgs, and religious institutions)
- Public pension and employee retirement plans
- Tax-exempt bonds used by municipalities and nonprofits
- Federal, state, and local governments
- Indian tribal governments
In short, TE/GE is the division that ensures everything from a small-town community foundation to a billion-dollar hospital system is complying with tax-exempt regulations.
Meet the New Leaders: Edward Killen and Robert Choi
Edward Killen – Now Leading Taxpayer Compliance Nationwide
Killen brings a deep resume to his new role as Acting Chief Taxpayer Compliance Officer, where he will oversee taxpayer service, enforcement, and even criminal investigations.
Background highlights:
- Former Commissioner and Deputy Commissioner of TE/GE
- Former IRS Chief Privacy Officer, managing data security and disclosure policy
- Holds extensive experience in executive leadership and tax administration policy
In his new capacity, Killen will likely prioritize modernizing compliance systems, improving taxpayer service, and expanding data-driven enforcement — all of which could affect how nonprofits are monitored and audited.
Robert Choi – Now Acting Commissioner of TE/GE
Choi brings decades of IRS experience and a reputation for operational discipline and procedural integrity.
Career snapshots:
- Served as IRS Chief Privacy Officer, focusing on access, use, and safeguarding of taxpayer data
- Directed the Employee Plans function within TE/GE, overseeing retirement plan compliance
- Acted as Deputy Commissioner of TE/GE since 2018
Choi’s appointment suggests a focus on regulatory precision, cybersecurity, and streamlined enforcement.
A Time of Heightened Scrutiny for Tax-Exempt Organizations
This leadership shuffle comes at a time when the IRS is under mounting pressure to increase audits of tax-exempt organizations, particularly after criticism from both Congress and watchdog groups about insufficient oversight.
Key Facts:
- According to the IRS FY2024 Data Book, audit rates for nonprofits fell to just 0.25%, down from 1.2% a decade ago
- The IRS has flagged rising concerns around donor-advised funds (DAFs), charitable giving abuse, and political activity disguised as social welfare
- The Bipartisan Infrastructure Law and Inflation Reduction Act allocated more than $80 billion to the IRS, much of it earmarked for enforcement modernization and staffing
Expect Robert Choi to ramp up strategic audits of high-risk entities, enhance digital reporting tools, and accelerate the use of AI to detect anomalies in Form 990 filings and exempt bond usage.
What This Means for Nonprofits and Government Entities
1. Increased Audit Risk
Nonprofits that haven’t conducted a self-audit or had an independent CPA review their compliance posture may now be vulnerable. IRS enforcement under Choi is expected to be more targeted — but also more tech-enabled.
2. Data Privacy & Security in the Spotlight
With both leaders having served as IRS Chief Privacy Officer, expect more rigorous data protection standards and scrutiny on how organizations collect and share donor or employee information.
3. Retirement Plan Oversight Will Tighten
Choi’s prior experience with the Employee Plans division signals increased oversight of nonprofit and government retirement plans, particularly with regard to ERISA compliance and plan fiduciary duties.
4. Faster Transition to E-Filing Requirements
The IRS is rapidly moving to mandate electronic filing for all tax-exempt forms, including Form 990-series and 8038s for tax-exempt bonds. Organizations still using paper systems must act now to modernize.
Proactive Steps Nonprofits Should Take
✔️ Conduct a full Form 990 review for transparency, consistency, and red flags
✔️ Ensure compliance with political activity restrictions under 501(c)(3)
✔️ Review data privacy policies for compliance with IRS Publication 1075 and other federal standards
✔️ Consult external CPAs on recordkeeping, reporting procedures, and audit readiness
✔️ For governments and public bond issuers: conduct a post-issuance compliance review
Final Word
Leadership transitions at the IRS don’t typically make headlines. But when they involve the TE/GE Division, nonprofits, governments, and tax-exempt institutions should pay close attention.
The appointments of Edward Killen and Robert Choi mark a new chapter in the IRS’s relationship with the tax-exempt sector — one likely defined by tech-driven audits, stricter privacy protocols, and heightened accountability.
Compliance isn’t optional. It’s a survival strategy.
Author: John S. Morlu II, CPA is the CEO & Chief Strategist of JS Morlu, a globally acclaimed public accounting and management consulting powerhouse.
Through cutting-edge technology and data-driven strategy, JS Morlu helps organizations operate with clarity, control, and compliance.
– ReckSoft (www.recksoft.com ): AI-powered reconciliation for nonprofit and donor accounting
– FinovatePro (www.finovatepro.com ): Cloud accounting for donor-driven missions
– Fixaars (www.fixaars.com ): Empowering nonprofits with maintenance and repair logistics
