Federal Judge Permits IRS to Share Tax Data with ICE for Immigration Enforcement
In a significant ruling on Monday, a federal judge decided against stopping the Internal Revenue Service (IRS) from providing tax data to Immigration and Customs Enforcement (ICE). This move facilitates the identification and deportation of individuals residing illegally in the United States.
U.S. District Judge Dabney Friedrich, appointed by former President Donald Trump, turned down a preliminary injunction requested by nonprofit organizations. These groups contended that undocumented immigrants who fulfill their tax obligations deserve the same privacy rights extended to U.S. citizens and legally present immigrants.
Judge Friedrich had previously declined a temporary restraining order in this case. Her decision follows closely on the heels of Melanie Krause’s resignation as acting IRS commissioner. Krause stepped down amid concerns over an arrangement allowing ICE to cross-check immigrant names and addresses with IRS tax records.
Alan Butler Morrison, representing the nonprofit groups, expressed disappointment with the court’s decision. In an email, he stated, “The plaintiffs are disappointed in the Court’s denial of our preliminary injunction, but the case is far from over. We are considering our options.” Morrison emphasized that the Department of Homeland Security (DHS) and the IRS are bound by strict limitations in the case.
Morrison added, “So far, DHS has not made formal requests for taxpayer data and plaintiffs will be keeping a close watch to be sure that the defendants carry out their promises to follow the law and not use the exception for unlawful purposes.”
The IRS has faced internal turmoil over the Trump administration’s decision to share taxpayer data. Previously, another acting commissioner announced retirement amid controversy surrounding access to IRS data by Elon Musk’s Department of Government Efficiency.
The Treasury Department asserts that the agreement with ICE aligns with President Trump’s broader immigration crackdown and border security agenda. The administration has employed various measures, including deportations and workplace raids, to fulfill these objectives.
Acting ICE Director has specified that collaboration with the Treasury and other departments is “strictly for the major criminal cases.”
Critics argue that the IRS-DHS information-sharing arrangement undermines privacy laws and affects the privacy of all Americans. However, Judge Friedrich noted in her ruling that the agreement does not contravene the Internal Revenue Code. Instead, it utilizes “statutorily authorized tools” for criminal investigations.
Federal law permits the IRS to share certain taxpayer information with other agencies, provided it aids criminal enforcement and the requesting agency satisfies specific conditions.
Judge Friedrich clarified that not all IRS information is subject to disclosure. Agencies must have prior knowledge of an individual’s name and address, provide this information to the IRS, and justify the relevance of the data for their investigation.
She further explained, “In other words, the IRS can disclose information it obtains itself (such as through audits), but not information it obtains exclusively from the taxpayer (such as a tax return filed by the taxpayer).” The law, however, exempts a taxpayer’s identity, including name, address, or taxpayer identifying number, from protected tax return information.
