IRS Shares Immigrant Tax Information With ICE, Raising Privacy Concerns

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IRS Shares Migrant Tax Information With ICE, Raising Privacy Concerns
photo via @therealtaxgirl

The Internal Revenue Service (IRS) shares immigrant tax information with ICE under a new agreement, allowing U.S. Immigration and Customs Enforcement to access certain taxpayer data about undocumented immigrants. This change has led to major concerns from immigration advocates and members of Congress, who say it could damage trust and discourage people from paying taxes.

This decision marks a big shift from how the IRS usually protects taxpayer privacy. For years, even undocumented immigrants were told their tax information was safe when filing using an Individual Taxpayer Identification Number (ITIN). Now, that promise may no longer hold for some.

What the New Agreement Allows

The memorandum of understanding (MOU) signed between the IRS and the Department of Homeland Security (DHS) outlines specific cases where the IRS shares immigrant tax information with ICE. These include:

  • Individuals who have final orders of removal but haven’t left the country.
  • People under federal criminal investigation, including for immigration-related offenses.
  • Specific tax records related to those investigations

While parts of the 15-page agreement remain redacted, officials say there are rules in place to control how ICE uses the data. A statement from the Treasury Department says the agreement is meant to support law enforcement without breaking existing laws on tax privacy.

“The law allows some exceptions in cases where there’s a criminal investigation,” said Sophie Delquie, a senior adviser at the Treasury. “This agreement follows long-standing legal authority granted by Congress.”

Advocates Say It Will Hurt Tax Compliance

Immigration groups say the deal could drive people into hiding. Many undocumented workers contribute to the economy and file taxes using ITINs, even though they are not eligible for federal benefits. They’ve done this in part because the IRS has always said the data wouldn’t be shared with immigration agents.

Murad Awawdeh, CEO of the New York Immigration Coalition, said the change will have real consequences.

“The IRS’s decision threatens the safety of thousands of people,” he said. “Instead of punishing those who follow the rules, we should be protecting their rights and encouraging tax compliance.”

Dozens of Democratic lawmakers also voiced concerns in a letter sent last month. They warned that the new policy could lead to fewer people filing taxes, which would hurt public programs and increase the burden on U.S. citizens.

IRS Leadership Shaken by Internal Pushback

The fallout from this decision has already reached inside the IRS. Melanie Krause, the agency’s acting commissioner, stepped down shortly after the MOU was signed. She is the third IRS leader to leave in recent months, joining Doug O’Donnell and William Paul—both of whom reportedly resisted the new policy.

Lawsuits have also been filed by immigrant rights organizations hoping to block the agreement from being enforced. These cases are ongoing, and their outcomes could decide how much access ICE will ultimately have to IRS data.

For now, the Treasury insists that the system is secure and designed only for serious cases. But many remain unconvinced.

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