Meredith Mast, Associate Member, Immigration and Human Rights Law Review
I. Introduction
Following weeks of speculation and reporting on interagency negotiations, the Internal Revenue Service (IRS) has entered into an unprecedented information-sharing agreement with the Department of Homeland Security’s (DHS) Immigration and Customs Enforcement (ICE) agency.[1] The agreement stems from President Donald Trump’s Executive Order 14165, which instructed DHS to “take all appropriate action to supplement available personnel to secure the southern border and enforce the immigration laws of the United States,” including through the deputization of additional employees of the United States to perform immigration functions.[2] In early February, as part of this broad directive, DHS Secretary Kristi Noem requested the assistance of IRS agents to carry out immigration enforcement alongside ICE.[3] Under the Memorandum of Understanding (MOU) establishing the partnership, the IRS is now permitted to share otherwise confidential information about individuals working in the United States without proper authorization with ICE.[4] The MOU marks a significant and controversial departure from the IRS’s broad confidentiality protections, especially as they relate to undocumented taxpayers.[5]
This Blog discusses the implications of an information-sharing agreement between the IRS and ICE. Although federal law permits the disclosure of confidential taxpayer information under a narrow set of exceptions, the IRS has a longstanding policy of safeguarding information relating to a taxpayer’s undocumented status from immigration and law enforcement authorities.[6] The new partnership between the agencies raises significant concerns for undocumented taxpayers and the broader legitimacy of the U.S. tax system.
II. Background
The U.S. tax system relies on contributions from individuals living and working within its borders, regardless of immigration status.[7] Based on long-held assurances that it would keep taxpayer information confidential, the IRS has fostered a foundation of trust among undocumented taxpayers, even when such information reveals details about an individual’s unlawful presence in the country.[8] This commitment to confidentiality has been a crucial factor in encouraging compliance and instilling confidence in the tax system.[9] The unprecedented agreement between the IRS and ICE threatens to completely dismantle that trust, jeopardizing a system that undocumented individuals have engaged with in good faith for decades.[10]
To adequately understand the gravity and implications of an information-sharing agreement between the IRS and federal immigration enforcement agencies, it is helpful to contextualize the legal background governing (1) the tax obligations of undocumented workers and (2) the IRS’s ability to share confidential taxpayer information.
A. Undocumented Workers in the United States Tax System
Undocumented workers in the United States are subject to the same basic tax filing obligations as citizens and non-citizen residents.[11] The IRS requires undocumented workers earning income in the United States to file a tax return.[12] In any circumstance, an individual taxpayer must include an identification number to file their return.[13] Traditionally, a Social Security number (SSN) suffices as the taxpayer’s identification.[14] However, for individuals ineligible to receive an SSN—including foreign nationals, legal residents, and undocumented individuals—the IRS created the Individual Taxpayer Identification Number (ITIN).[15] To apply for an ITIN, the IRS requires individuals to provide documentation substantiating their identity and non-resident or undocumented status.[16] The ITIN was created specifically to effectuate tax administration, not to gather information on non-citizen taxpayers.[17]
B. Taxpayer Confidentiality
Taxpayer privacy is a high priority for the IRS.[18] Tax returns, as well as applications for ITINs, require taxpayers to reveal personal identifying information about themselves and their dependents. Information disclosed through a tax return may include, but is not limited to: the name and address of the employee, the name and address of the employer, and the name and address of the taxpayer’s educational institution, if applicable for education tax credits.[19]
Regardless of citizenship status, information on an individual’s tax return is deemed confidential by law.[20] Section 6103(a) places a general prohibition on the disclosure of taxpayer return information to other federal agencies.[21] A federal employee’s willful disclosure of confidential information protected under § 6103 constitutes a felony offense.[22] As such, without a specific statutory exemption, the IRS is prohibited from proactively sharing information about an ITIN holder’s residency or immigration status with law enforcement or immigration authorities.[23]
The guarantee of confidentiality is especially crucial among undocumented ITIN holders, many of whom may fear that the disclosure of personal identifying information may be exploited to locate, detain, and/or deport them or their family members.[24] The IRS has adamantly maintained that the ITIN was designed solely to facilitate tax administration, not to gather information on or surveil non-citizen taxpayers.[25] Since its inception, the IRS has repeatedly rejected suggestions from other federal agencies and public commenters that ITINs should be leveraged for immigration enforcement.[26] Consequently, in early promotions of the ITIN program, the IRS upheld its commitment to confidentiality for all taxpayers, specifically noting that the ITIN creates “no interference concerning [one’s] immigration status.”[27]
Exceptions to the Confidentiality Requirement
Although § 6103 makes taxpayer confidentiality the default, §§ 6103(c)-(o) identify several circumstances under which a disclosure may be permitted.[28] Of particular relevance for this Blog is the carve-out for disclosures to federal non-tax officers and employees.[29]
- 6103(i)(1) permits the disclosure of returns and return information for use in non-tax-related criminal investigations. A federal agency requesting confidential information for such investigations must obtain an ex parte order from a federal district judge or magistrate, finding that: (1) there is reasonable cause to believe a specific criminal act was committed, (2) there is reasonable cause to believe that the return or return information is connected to that crime, and (3) the information is being sought exclusively for use in a federal criminal investigation and the information cannot be reasonably obtained from another source.[30]
Section 6103(i)(2) permits the head of any federal agency to seek the disclosure of only return information via a written request to the IRS. The request must include (1) the name and address of the taxpayer in question, (2) the taxable periods to which the return information relates, (3) the statutory authority under which the criminal investigation is being conducted, and (4) the specific reasons why the disclosure is relevant to the investigation.[31] Under each noted § 6103(i) exception, the information disclosed may only be available to federal officials personally and directly engaged in the investigation.[32]
C. The IRS-ICE Agreement
The MOU between the IRS and ICE authorizes ICE officials to submit to the IRS the names and addresses of individuals whom they suspect are within the United States unlawfully.[33] In return, the IRS will cross-reference its taxpayer data to verify the accuracy of the information to assist ICE in locating the individuals.[34] The MOU relies on § 6103(i)’s criminal investigation exception as the legal authority for permitting such disclosures of otherwise confidential taxpayer information.[35] The agreement is specifically tailored towards criminal investigation under 8 U.S.C. § 1253(a)(1), which makes it a criminal offense to willfully remain in the United States for ninety days following a final removal order, and other “specifically designated Federal criminal statute[s].”[36] Defense of the MOU bears little to no relation to any legitimate concerns about tax compliance or administration; rather, it has been justified by the Trump administration as a mechanism to advance a radical and exploitative mass deportation agenda.[37]
Litigation over the legality of the agreement is ongoing.[38] Before the official consummation of the IRS-ICE partnership, two Chicago-based immigrant advocacy groups attempted to pre-emptively block the agreement by filing for a temporary restraining order.[39] Because limited information about the agreement was available at the time of filing, the D.C. District Court denied the advocacy groups’ motion on a lack of standing.[40] However, as the case progresses, the plaintiffs continue to highlight concerns surrounding the agreement.[41] Specifically, in response to the government submitting the MOU to the court, the plaintiffs raised concerns that the heavily redacted nature of the document suggests that the agreement will be used for large-scale immigration enforcement operations, rather than the individualized criminal investigation purposes contemplated by § 6103(i).[42]
III. Discussion
Even in instances where § 6103 may justify the disclosure of confidential taxpayer information for criminal investigation purposes, the invocation of this exception for the overarching purpose of criminally prosecuting undocumented immigrants calls into question the longstanding practice of the IRS declining to use these taxpayers’ information for immigration enforcement.[43] The information-sharing agreement between the IRS and ICE threatens to destroy the trust that has been built between undocumented ITIN holders and the IRS, as well as harm overall tax compliance among this community.
A. Erosion of Trust
The IRS requires individuals earning income in the United States to file a tax return regardless of citizenship status.[44] For decades, the agency has assured taxpayers who file with an ITIN that the information they provide to the IRS would not be shared with other federal agencies, including immigration authorities.[45] Even though ITINs provide significant identifying information that could theoretically help locate and prosecute individuals who are in the United States without legal authorization, these identification numbers were never intended to be used outside the tax system.[46] Former IRS Commissioner Mark Everson explained that the IRS cannot prevent other agencies from using ITINs for non-tax purposes, but nevertheless continues to urge other agencies of the “unsuitability of using ITINs outside of the tax system.”[47] In February, acting under former Commissioner Doug O’Donnell, the IRS previously rejected a DHS request to disclose the home addresses of 700,000 individuals suspected of being in the United States without legal authorization, claiming that such disclosures would violate federal law.[48] Based on past practice and policy, immigrants’ rights advocacy organizations have continually bolstered ITIN holders’ trust in the tax system by assuring that their information would not be used for immigration enforcement.[49]
The IRS-ICE agreement radically weaponizes the trust that undocumented immigrants have instilled in the IRS. By attempting to use the 6103(i) exception to leverage confidential information disclosed in good faith by ITIN holders, the agreement betrays the foundation of trust that the IRS spent years building.[50] At its core, the proposal presents itself as a twisted, calculated maneuver by the federal government. Despite receiving little personal benefit from complying with federal tax obligations, undocumented taxpayers have continued to contribute to the U.S. tax system with reassurances that their compliance would not be exploited.[51] The Trump administration’s attempt to capitalize on the trust that has been built is not only fundamentally unfair, but effectively penalizes these individuals for lawfully fulfilling their tax obligations and contributing to the federal revenue.
B. Detrimental Effects on Tax Compliance
Directly connected to concerns that the IRS-ICE agreement will upend the longstanding relationship between the IRS and undocumented taxpayers is the likelihood that the agreement will have a detrimental effect on overall tax compliance.[52] The U.S. tax system functions on the voluntary compliance of both citizen and non-citizen taxpayers.[53] Particularly in the case of undocumented ITIN holders, voluntary compliance is grounded in the expectation that taxpayer information will be used solely for tax administration purposes.[54] For years, IRS officials and tax experts have explicitly cautioned against the sharing of taxpayer information for immigration enforcement.[55] Former Commissioner Everson testified in 2004 that “any sharing of confidential taxpayer information, directly or indirectly, with immigration authorities would have a chilling effect on efforts to bring ITIN holders, and potential ITIN holders, into the U.S. tax system.”[56] In 2016, the National Taxpayer Advocate voiced similar concerns, highlighting that the ITIN system enables the IRS to navigate a delicate balance between tax law and immigration law, which, if disrupted, will undermine voluntary compliance.[57]
By agreeing to divulge otherwise confidential information to DHS and ICE, the IRS has effectively erased any incentive for undocumented taxpayers to continue to meet their tax obligations.[58] The looming possibility that lawfully submitted tax information could now be used to facilitate detention or deportation introduces a risk that many taxpayers will find unjustifiable.[59] Even if a taxpayer is not currently subject to investigation or removal under 8 U.S.C. § 1253(a)(1), tax experts warn that the mere threat of administrative error or future misuse of data may be enough to deter broader compliance.[60]
A reduction in tax compliance among undocumented taxpayers will inflict significant detriment on both the federal government and individual taxpayers.[61] Former IRS Commissioners have cautioned that discouraging ITIN holder participation in the tax system through threats of immigration enforcement will deprive the government of substantial tax revenue.[62] Based on reassurances of confidentiality, the IRS has been able to achieve significant tax contributions among undocumented workers.[63] In 2023 alone, undocumented immigrants collectively paid over $65 billion in federal taxes, with roughly $43 billion in payroll taxes.[64] The Yale Budget Lab, a non-partisan economic policy research center, estimates that decreased compliance resulting from the IRS-ICE agreement could cause the federal revenue to decrease by $25 billion in fiscal year 2026.[65]
Notably, undocumented workers, despite contributing to the federal tax system, are barred from reaping many of the benefits into which they pay.[66] Without a valid SSN, undocumented taxpayers are ineligible for the Earned Income Tax Credit and most federal benefits, including Social Security, Medicare, and the Supplemental Nutrition Assistance Program.[67] Yet in 2022, undocumented immigrants contributed over $25 billion in Social Security taxes and over $6 billion in Medicare taxes.[68] By discouraging tax payments among this group, the IRS-ICE agreement will reduce the aggregate contributions to essential social insurance programs for all taxpayers.[69] The agreement not only breaks the decades-long trust undocumented taxpayers placed in the confidentiality of their information, but also poses a significant risk to the integrity of the U.S. tax system by discouraging a substantial segment of taxpayers from continued compliance and participation.
IV. Conclusion
The IRS-ICE information-sharing agreement signifies a dark and troubling redefinition of the relationship between tax administration and immigration enforcement. By exploiting a narrow exception to the rules on taxpayer confidentiality to assist in ICE’s immigration agenda, the IRS is taking advantage of millions of undocumented individuals’ good-faith contributions to the U.S. tax system. The arrangement creates an outcome in which everyone stands to lose. By eroding and betraying the trust that undocumented individuals have placed in the IRS, this partnership will yield severely detrimental effects on the tax system at large, reducing the overall federal revenue and vital contributions to social assistance programs. This partnership sets a dangerous precedent by deputizing tax officials for immigration policy objectives that are completely unrelated to tax administration.
[1] Memorandum of Understanding Between the U.S. Dept. of Treasury, IRS & U.S. Dept. of Homeland Sec., ICE for the Exchange of Information for Nontax Criminal Enforcement (Apr. 7, 2025) (on file with the U.S. Dep’t of Treasury) [hereinafter MOU]; Fatima Hussein, IRS acting commissioner is resigning over deal to send immigrants’ tax data to ICE, AP sources say, Assoc. Press (Apr. 8, 2025), https://apnews.com/article/irs-ice-immigration-enforcement-trump-d2ac6f7ac0a1f60e907cd3b52d0db34d [https://perma.cc/EP7R-SKK8].
[2] Exec. Order No. 14,165, 90 Fed. Reg. 8467 (Jan. 20, 2025).
[3] Letter from Kristi Noem to Scott Bessent, Secretary of Homeland Security, DHS (Feb. 7, 2025), https://www.taxnotes.com/research/federal/other-documents/treasury-tax-correspondence/homeland-security-requests-personnel-treasury/7rl22 [https://perma.cc/DP7R-8GEU].
[4] MOU, supra note 1.
[5] See Social Security Number and Individual Taxpayer Identification Number Mismatches and Misuse: Hearing Before the Subcomm. On Oversight & Subcomm. On Social Security of the Comm. On Ways and Means, 108th Cong. 10 (2004).
[6] See id.
[7] Tax Payments by Undocumented Immigrants, Inst. on Tax’n & Econ. Pol’y (July 30, 2024), https://itep.org/undocumented-immigrants-taxes-2024/ [https://perma.cc/8CXJ-MQBR].
[8] Social Security Number and Individual Taxpayer Identification Number Mismatches and Misuse: Hearing Before the Subcomm. On Oversight & Subcomm. On Social Security of the Comm. On Ways and Means, 108th Cong. 11 (2004) (statement of Mark Everson, Comm’r, IRS) [hereinafter Statement of Mark Everson].
[9] “[T]he fact that the IRS does not generally share applicants’ private information with immigration enforcement agencies is key to tax compliance.” Tax Payments by Undocumented Immigrants, supra note 7.
[10] Statement of Mark Everson, supra note 8.
[11] Nonresident aliens, IRS, https://www.irs.gov/individuals/international-taxpayers/nonresident-aliens [https://perma.cc/K79B-SCJ4] (last visited Apr. 16, 2025).
[12] Taxation of nonresident aliens, IRS, https://www.irs.gov/individuals/international-taxpayers/taxation-of-nonresident-aliens [https://perma.cc/KQ9H-WAPV] (last visited Apr. 16, 2025).
[13] 26 U.S.C. § 6109(a)(1).
[14] 26 U.S.C. § 6109(a).
[15] Statement of Mark Everson, supra note 8.
[16] Taxpayer identification numbers (ITIN), IRS, https://www.irs.gov/tin/taxpayer-identification-numbers-tin [https://perma.cc/AKH6-HCUR] (last visited Apr. 16, 2025).
[17] Id.
[18] Taxpayer privacy isn’t just a right – it’s the law, IRS (Aug. 1, 2024), https://www.irs.gov/newsroom/taxpayer-privacy-isnt-just-a-right-its-the-law [https://perma.cc/598B-44XM].
[19] Complaint at ¶ 24, Centro de Trabajadores Unidos et al. v. Bessent et al., No. 1:25-cv-00677 (D.C. Cir. 2025), ECF No.1; Form W-2 Wage and Tax Statement, IRS (2025), https://www.irs.gov/pub/irs-pdf/fw2.pdf [https://perma.cc/SK85-7MDX]; Form 1040 U.S. Individual Income Tax Return, IRS (2025), https://www.irs.gov/pub/irs-pdf/f1040.pdf [https://perma.cc/5BKN-NARX]; Form 1098-T Tuition Statement, IRS (2025), https://www.irs.gov/pub/irs-pdf/f1098t.pdf [https://perma.cc/L3XJ-3HAX].
[20] 26 U.S.C. § 6103(a).
[21] 26 U.S.C. § 6103(a)(1).
[22] 26 U.S.C. § 7213(a)(1).
[23] Individual Taxpayer Identification Number (ITIN) A Powerful Tool for Immigrant Taxpayers, Nat’l Immigr. L. Ctr. (Jan. 2017), https://www.nilc.org/wp-content/uploads/2015/11/ITIN-facts-Q-and-A.pdf [https://perma.cc/WT7G-2DQE] (“The IRS has strong privacy protections in place to ensure that immigrants who report their income and file their taxes are not at risk of having their information shared.”).
[24] See Statement of Mark Everson, supra note 8.
[25] Brief for IRS-Funded Tax Preparation Sites as Amici Curiae Supporting Plaintiffs, at 2–4, Centro de Trabajadores Unidos, et al., v. Bessent et al., No. 1:25-cv-00677 (D.C. Cir. 2025), ECF No. 57 [hereinafter Amicus Brief].
[26] Id. at 4–5.
[27] Id. at 5.
[28] 26 U.S.C. § 6103(c)-(o).
[29] 26 U.S.C. § 6103(i).
[30] 26 U.S.C. § 6103(i)(1)(B).
[31] 26 U.S.C. § 6103(i)(2)(B).
[32] Treas. Reg. § 301.6103(i)-1.
[33] MOU, supra note 1.
[34] Richard Rubin & Michelle Hackman, IRS Nears Deal to Share Data for Immigration Enforcement, Wall Street J., (Mar. 22, 2025), https://www.wsj.com/politics/policy/irs-nears-deal-to-share-data-for-immigration-enforcement-df60eaad [https://perma.cc/5TFR-7ZNC]; MOU, supra note 1.
[35] MOU, supra note 1.
[36] Id.
[37] See Letter from Kristi Noem to Scott Bessent, supra note 3; Kris Cox, IRS-ICE Agreement Weakening Privacy Protections Poses Risks for All Taxpayers, Ctr, of Budget and Pol’y Priorities (Apr. 21, 2025), https://www.cbpp.org/blog/irs-ice-agreement-weakening-privacy-protections-poses-risks-for-all-taxpayers [https://perma.cc/N399-85YB].
[38] Case: Centro de Trabajadores Unidos v. Bessent, C.R. Litig. Clearinghouse (Mar. 7, 2025), https://clearinghouse.net/case/46204/ [https://perma.cc/EP7Q-YBYG].
[39] Id.
[40] Order Denying Motion for Temporary Restraining Order, Centro de Trabajadores Unidos et al. v. Bessent et al., No. 1:25-cv-00677 (D.C. Cir. 2025), ECF No. 16.
[41] See Plaintiff’s Reply Motion to Compel Production of Unredacted Exhibit, Centro de Trabajadores Unidos et al. v. Bessent et al., No. 1:25-cv-00677 (D.C. Cir. 2025), EFC No. 39.
[42] Id.
[43] Rubin & Hackman, supra note 34; Statement of Mark Everson, supra note 8.
[44] Statement of Mark Everson, supra note 8, at 10.
[45] Maurice Goldman, Taxation Deportation Without Representation, AILA (Apr. 10, 2025), https://www.aila.org/library/taxation-deportation-without-representation [https://perma.cc/EVJ6-W9BW]; ICE and IRS reach agreement to share taxpayer information of suspected undocumented immigrants, Econ. Pol’y Inst. (Apr. 11, 2025), https://www.epi.org/policywatch/ice-and-irs-reach-agreement-to-share-taxpayer-information-of-suspected-undocumented-immigrants/ [https://perma.cc/66JQ-UJ8Q].
[46] Statement of Mark Everson, supra note 8, at 9.
[47] Id.
[48] Jacob Bogage, Jeff Stein, Maria Sacchetti, & Lisa Rein, DHS asks IRS for addresses of people believed to be in U.S. illegally, Wash. Post (Feb. 28, 2025), https://www.washingtonpost.com/business/2025/02/28/immigration-enforcement-trump-administration-irs/ [https://perma.cc/GF7K-M7PH]; Justin Razavi, Damita Menezes, & Jorge Ventura, IRS-ICE near agreement to share tax data for deportations: Report, The Hill (Mar. 24, 2025),
https://thehill.com/homenews/5210011-irs-ice-taxpayer-data/ [https://perma.cc/NY94-ELGX]; see 26 U.S.C. § 7213(a)(1).
[49] The Facts About the Individual Taxpayer Identification Number (ITIN), Amer. Immigr. Council (Mar. 14, 2022), https://www.americanimmigrationcouncil.org/research/facts-about-individual-taxpayer-identification-number-itin [https://perma.cc/QY8M-EFFA]; Individual Taxpayer Identification Number (ITIN) A Powerful Tool for Immigrant Taxpayers, supra note 23; Amicus Brief, supra note 25, at 6–9.
[50] ICE and IRS reach agreement to share taxpayer information of suspected undocumented immigrants, supra note 45.
[51] Id.
[52] See Statement of Mark Everson, supra note 8, at 9–11.
[53] Id.
[54] Id.
[55] Id.
[56] Id. at 12.
[57] National Taxpayer Advocate Annual Report to Congress, Vol. 1, at 241 (2016).
[58] See Statement of Mark Everson, supra note 8.
[59] Id. at 12.
[60] See Dahlia Mignouna, Brandon DeBot, & Chye-Ching Huang, IRS-DHS Agreement to Share Taxpayer Information Would Create Significant Risks to All Taxpayers, NYU Tax L. Ctr. (Apr. 4, 2025), https://taxlawcenter.org/blog/irs-dhs-agreement-to-share-taxpayer-information-would-create-significant-risks-to-all-taxpayers [https://perma.cc/U3LU-QMFV] (“Cases where mistaken administrative work results in wrongful arrest, deportation, or imprisonment are not unheard of—and the U.S. may see many more “administrative errors” if the IRS and DHS reach the unprecedented and troubling data-sharing agreement that they are reportedly nearing… If DHS plans to provide the IRS with a list of names and addresses for the IRS to confirm (or update) addresses, it will be hard for the IRS to ascertain with any real degree of confidence that the taxpayer whose information the IRS is looking at is the same individual DHS believes is subject to a deportation order. There would be a major risk of false positives—that is, that a name and/or address might look to match up, but actually be the information of a taxpayer who is not under even alleged criminal investigation.”).
[61] See Statement of Mark Everson, supra note 8, at 12.
[62] Id.
[63] The Potential Impacts of IRS-ICE Data Sharing on Tax Compliance, The Budget Lab at Yale (Apr. 8, 2025), https://budgetlab.yale.edu/research/potential-impact-irs-ice-data-sharing-tax-compliance [https://perma.cc/4BK2-74M6].
[64] This figure does not include state and local tax payments. Id. However, the Institute on Taxation and Economic Policy estimated that undocumented taxpayers contributed over $37 billion in state and local taxes in 2022. Tax Payments by Undocumented Immigrants, supra note 7.
[65] The Potential Impacts of IRS-ICE Data Sharing on Tax Compliance, supra note 63.
[66] Id.
[67] Id.
[68] Id. (Note: these figures include both the employer and employee share of these taxes.)
[69] See id.
