Update: November 21, 2025 – A federal judge blocked the IRS from further record-sharing with ICE. This order came in the case Center for Taxpayer Rights et al. v Internal Revenue Service et al, a lawsuit filed against the federal government by a coalition of small businesses, a tax clinic, and labor unions. The judge also wrote that it is likely the agency’s data-sharing agreement is unlawful, violating the IRS’s own privacy and confidentiality policies. The judge’s order also blocks the IRS from sharing info with the Department of Homeland Security (DHS) as a whole.
Timeline:
August 2025 – The IRS discloses tens of thousands of taxpayer records to ICE, including personally identifying information and home addresses. IRS records revealed in lawsuit showed that ICE requested more than 1 million records from the IRS earlier in 2025.
April 7, 2025 – The IRS and ICE sign an information-sharing agreement.
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On April 7, 2025, the Internal Revenue Service (IRS) and U.S. Immigration and Customs Enforcement (ICE) in the U.S. Department of Homeland Security (DHS), executed a Memorandum of Understanding (MOU) to create a framework for the sharing of information between the agencies, as numerous news outlets reported. The MOU was made public in a declaration by filed by IRS Chief Privacy Officer Kathleen Evey Walters, as part of litigation brought by Centro de Trabajadores Unidos and Immigrant Solidarity Dupage, two immigrant worker organizations, which sued Treasury Secretary Scott Bessent to stop the IRS from engaging in the unauthorized disclosure of taxpayer information for the purposes of immigration enforcement.
The MOU governs requests submitted by ICE or DHS for tax return information under 26 U.S.C. § 6103(i)(2). The Walters declaration states that “As of April 7, 2025, DHS and ICE have not requested the return information of any taxpayers pursuant to the MOU. Between March 17, 2025, and April 7, 2025, the IRS has not received any requests for taxpayer information from DHS or ICE and has not provided any return information to DHS or ICE.”
According to the Washington Post, IRS lawyers had counseled the heads of DHS and the Treasury Department that the deal likely violates privacy law. Numerous reports noted that the acting head of IRS, Melanie Krause, pushed back and ultimately quit over deal to share the agency’s data with immigration authorities.
Impact: This is a major and unprecedented action that risks the sensitive personal and location data of immigrant tax filers, which ICE could potentially use to target them for enforcement actions. The IRS is generally prohibited from sharing taxpayer information, even with other federal agencies, although there are narrow exceptions related to criminal investigations. The new MOU relies on claiming that the information will be used for the purposes of criminal investigation against persons who are subject to a final order of removal “or another specifically designated Federal criminal statute.”. This would be a change from decades of practice where the IRS has sought to keep information submitted by immigrant tax filers confidential—including the information of undocumented immigrants who file their taxes with Individual Taxpayer Identification Numbers (ITIN). The ability to file with ITIN numbers has allowed U.S. residents who lack an immigration status to pay their fair share of taxes on their earnings without fear of retribution. Undocumented immigrants contribute billions of dollars in taxes every year using ITIN numbers, including contributions to Social Security and Medicare, even though they themselves are excluded from getting those benefits and from most other tax benefits.
Under the terms of the deal, ICE officials can ask the IRS for information about persons who have orders of deportation or whom they are otherwise investigating. As a result of ICE and IRS cooperation in this manner, persons who lack an immigration status may be much less likely to file their federal taxes out of fear of immigration enforcement, and those who have filed in the past are at risk for being targeted for detention and deportation for violating immigration laws.