IRS to share Information with ICE

In a sweeping and controversial policy change, the Internal Revenue Service (IRS) has agreed to share confidential taxpayer information with Immigration and Customs Enforcement (ICE) to aid in deportation efforts. This move marks a sharp departure from decades of strong tax privacy protections and has raised alarms across immigrant communities, among legal experts, and even within the IRS itself.  

The new policy, formalized through a memorandum of understanding (MOU) between the IRS and ICE, allows immigration authorities to request detailed taxpayer information for individuals who have been ordered to leave the United States or are under investigation for federal crimes, including immigration violations. Information ICE can request includes home addresses, income and earnings data, and family details disclosed on tax filings. While federal law typically bars the IRS from sharing such data—even with other government agencies, this agreement relies on a narrow exception in tax law that permits data sharing for criminal investigations. ICE must include specific identifying details and justify each request based on the alleged offense.  

This shift has drawn considerable legal and ethical criticism. IRS attorneys and privacy officials have expressed concern that the agreement may violate federal statutes designed to protect taxpayer confidentiality. In protest, Melanie Krause, the acting head of the IRS, reportedly resigned, and the agency’s chief privacy officer also stepped down. Former IRS National Taxpayer Advocate Nina Olson called the agreement “unprecedented,” noting that it undermines a long-standing promise that tax information would remain confidential. Legal scholars warn that any IRS official who authorizes the release of protected data could face civil or even criminal penalties.  

The implications of this change are significant. For years, the IRS has encouraged undocumented immigrants to file taxes using Individual Taxpayer Identification Numbers (ITINs), offering reassurance that their personal information would not be used for immigration enforcement. Millions of immigrants have complied, contributing an estimated $96.7 billion in tax revenue in 2022 alone. Now, that trust is at risk. The policy could discourage both undocumented and documented immigrants from filing taxes, potentially resulting in billions of dollars in lost federal revenue. A mere 10% drop in filings could cost the government an estimated $9.5 billion annually. It could also push more employment “off the books,” expand the informal economy, and further damage already fragile relationships between immigrant communities and the federal government.  

As of April 2025, no taxpayer information has yet been shared under this agreement. Immigrant advocacy organizations have filed lawsuits to stop the policy, arguing that it violates federal law and undermines the integrity of the tax system. The IRS and Treasury Department have defended the agreement, claiming it is lawful and grounded in congressional authority. However, legal proceedings are ongoing, and the final outcome remains uncertain.  

In the meantime, until a court rules otherwise, and unless data is actually transferred, taxpayer information remains protected under current law. Community organizations and legal experts are actively monitoring the situation and offering resources to affected individuals. As one immigrant taxpayer put it, “It feels like a broken promise, a betrayal”—a sentiment now widely echoed across communities facing the fallout of this unprecedented policy shift.  

Ultimately, this decision could reshape how immigrants interact with the U.S. tax system, with broad implications for public trust, tax compliance, and federal revenue. The resolution of the ongoing legal battle will determine whether this policy stands or is rolled back.

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