IRS Nears Deal to Share Info with ICE: Controversial Data-Sharing to Support Deportation Efforts

Overview: IRS and ICE Collaboration Raises Concerns

As of March 23, 2025, the Internal Revenue Service (IRS) is on the brink of finalizing a controversial data-sharing agreement with U.S. Immigration and Customs Enforcement (ICE), according to two sources familiar with the matter. The potential deal would allow immigration authorities to access confidential tax information to aid in identifying and deporting undocumented immigrants—marking a significant shift in how taxpayer data is used.

This move is part of a broader effort by the Trump administration to tighten immigration enforcement and expand deportation operations.

This move would mark a significant shift in how federal agencies use sensitive taxpayer information—and has raised deep concerns among privacy advocates, immigrant rights groups, and tax professionals.

What’s in the Deal?

According to sources, the proposed agreement would allow ICE to:

DHS Secretary Kristi Noem or ICE Acting Director Todd Lyons must initiate each request.
Details Required: Requests must include:
- Full name and address of the suspected individual.
- The date of any final deportation or removal order
IRS Response: The IRS will only confirm whether the information matches its records—not provide the data directly.
Have the IRS cross-check these names against its confidential tax records.
Use the findings to support deportation investigations or proceedings.
While the current draft agreement does not allow IRS agents to directly hand over addresses, it does permit them to confirm whether the submitted data is accurate.

While the deal is not yet finalized, internal sources say negotiations are in their final stages.

Why This Matters: Privacy and Legal Ramifications

This potential data-sharing arrangement is triggering alarm among IRS career officials and privacy advocates. Here’s why: The IRS would receive names of suspected undocumented migrants from ICE and then cross-reference this data against its confidential taxpayer databases. This process raises significant legal and privacy concerns, as it involves the sharing of sensitive taxpayer information and highlights the tension between immigration enforcement and taxpayer protections.

Why This Is So Controversial: Privacy and Legal Questions

Federal law (26 U.S. Code § 6103) strictly limits the disclosure of tax return information.
Taxpayer data is only supposed to be shared with certain authorized agencies (like the FBI for criminal investigations), and DHS/ICE are not on that list. Even for criminal violations, disclosure typically requires court approval.
Immigrant rights groups argue this agreement could break the law and betray the trust that undocumented taxpayers have placed in the IRS.

“This policy could weaponize the tax system against immigrants,” said a spokesperson from one Chicago-based advocacy group that sued the Treasury Department and IRS in early March.

Learn more: IRS Guidance on Tax Information Confidentiality

How Undocumented Immigrants File Taxes

Many undocumented immigrants do pay taxes using an Individual Taxpayer Identification Number (ITIN). Here’s how the process works:

ITINs are issued by the IRS to individuals who are not eligible for a Social Security Number (SSN), including undocumented workers.
They can use an ITIN to file tax returns, report income, and pay federal taxes—often as a way to stay in good standing and prove contributions to society.
Have legal protections under U.S. tax law, which guarantees privacy and encourages voluntary compliance.

However, there are potential risks for those suspected of being in the country illegally. The IRS is nearing a deal with ICE to share addresses of individuals suspected of being in the country illegally, using tax data to aid in identifying undocumented immigrants. This raises concerns over privacy and the ethical implications of targeting those who pay taxes.

According to a 2023 IRS report, over 1.7 million tax returns were filed using ITINs, generating billions in federal revenue.

In 2022 alone, undocumented immigrants contributed an estimated $25.7 billion in Social Security taxes—often using borrowed or invalid SSNs, according to the Bipartisan Policy Center.

Estimated Annual Contributions by Undocumented Immigrants (2022)

Source: Bipartisan Policy Center

Contribution Type	Estimated Amount (2022)
Social Security Taxes	$25.7 billion
Medicare Taxes	$3.1 billion
Federal Income Taxes	$5.5 billion

If ICE gains access to ITIN-holder data:

Fear of deportation may drive immigrants away from the tax system.
Billions in lost tax revenue could follow.
Public health and safety services funded by those taxes could be disrupted.

The Bigger Picture: Part of a Larger Deportation Agenda

This potential IRS-ICE agreement fits into a much broader immigration enforcement strategy led by the Trump administration’s deportation agenda:

Revocation of Parole Protections: The Department of Homeland Security recently revoked temporary humanitarian protections for over 500,000 migrants from Cuba, Haiti, Nicaragua, and Venezuela. See full story: DHS Ends Protections for CHNV Migrants
Expanded Use of Law Enforcement Tools: The administration has sought to broaden data access across agencies to locate, track, and remove immigrants living in the U.S. without authorization.
Aggressive Deportation Tactics: A renewed emphasis on removal of long-term undocumented residents, even those with no criminal records, has sparked widespread concern among immigration advocates and some government employees.

See related article: Trump Moves to End CHNV Parole Program

Criticism from Within and Beyond

IRS staff, immigration lawyers, civil liberties groups, and immigration officials are voicing concerns:

IRS Officials Worry About Trust Erosion

Allowing ICE to tap into IRS data may damage the public trust that’s essential to voluntary tax compliance.

“If people fear their tax data could be used against them for deportation, they may stop filing taxes altogether,” one senior IRS official reportedly warned.

Legal and Ethical Concerns

Civil liberties groups argue the agreement would stretch legal boundaries and set a dangerous precedent for the weaponization of sensitive federal data.

“This isn’t just about taxes—it’s about privacy, due process, and the line between civil enforcement and surveillance,” said a spokesperson for the ACLU.

Lawsuits and Pushback

Legal Challenge: IRS Sued Over Potential Disclosure of Taxpayer Information

Two immigrant advocacy groups—Centro de Trabajadores Unidos and Immigrant Solidarity DuPage—have filed a lawsuit to prevent the IRS from sharing taxpayer data with ICE. Sources familiar with the matter told ABC News about the negotiations, highlighting concerns over the use of taxpayer information in the context of immigration enforcement.

Filed By:
Public Citizen Litigation Group
Alan Morrison (noted constitutional law scholar)
Raise the Floor Alliance
Legal Action:
A federal court recently denied a temporary restraining order (TRO) that would have stopped the IRS from moving forward with the agreement.
However, the case continues as plaintiffs seek a permanent injunction.

Read the Complaint and TRO Motion:View court documents

Key Quotes from Advocates

Nandan Joshi, lead attorney at Public Citizen:

“The IRS must disclose the terms of this unprecedented agreement. Congress created taxpayer confidentiality laws after the Nixon administration abused tax data. That history must not be repeated.”

Kevin Herrera, Legal Director of Raise the Floor Alliance:

“This is reckless and unprecedented. If immigrants cannot trust the IRS to keep their information private, the integrity of the entire tax system could collapse.”

Their legal argument: Federal tax law prohibits this kind of data-sharing unless Congress specifically allows it, and DHS/ICE are not exempted.

Potential Impact: Fear, Non-Compliance, and Data Abuse

If finalized, this agreement could have wide-reaching consequences:

Trust in the IRS could erode, especially among undocumented communities and suspected undocumented immigrants who previously felt safe filing taxes under current confidentiality protections.
Fewer ITIN filers may come forward, hurting tax revenue and pushing more workers into the cash-based underground economy.
Broader implications: This could set a precedent for other agencies seeking access to IRS data for unrelated enforcement purposes.

Timeline of Key Events

Date	Event
Jan 2025	DHS circulates memo to IRS requesting bulk taxpayer data
Feb 2025	IRS confirms layoffs of 6,700 employees amid restructuring
Mar 2025	Draft agreement revised to allow address confirmation only
Mar 2025	Immigrant rights groups file lawsuit in Chicago federal court

The Broader Context: Immigration and Surveillance

The Biden administration previously walked back aggressive immigration surveillance practices. However, Trump’s re-election campaign has promised to revive mass enforcement tactics. Granting ICE access to IRS data would:

Bypass traditional due process safeguards
Enable mass raids based on tax records to locate migrants suspected of being in the U.S. illegally
Set a dangerous precedent for future government overreach

Related Precedents

Watergate Scandal: Congress passed tax privacy laws in the 1970s after it was revealed President Nixon used IRS data against political enemies.
Post-9/11 Surveillance: Several government agencies attempted to use data-sharing to track individuals, but such efforts were often rolled back due to privacy concerns and lawsuits.
President Donald Trump: During President Donald Trump’s administration, there was a hardline approach to immigration enforcement. This included discussions about the IRS potentially agreeing with the Department of Homeland Security to aid in locating undocumented migrants as part of ongoing deportation efforts.

What Comes Next?

The court may soon hear arguments on whether the IRS is violating federal law by engaging in this deal.
Congress could also take action to clarify and strengthen taxpayer protections.

How You Can Help or Stay Informed

Contact your Representative to oppose misuse of taxpayer data: Find your representative
Support legal defense funds that protect immigrant communities: RAICES, National Immigration Law Center
Stay informed via independent legal organizations like Public Citizen

Frequently Asked Questions (FAQs): IRS-ICE Data Sharing Agreement for Immigration Enforcement

1. Is there currently a deal between the IRS and ICE to share taxpayer data for immigration enforcement?
As of now, there is no confirmed public deal allowing systematic sharing of IRS taxpayer data with ICE for immigration enforcement. However, proposals or leaked discussions about such a possibility have raised serious concerns among immigration advocates, privacy experts, and immigrant communities.

2. What kind of data does the IRS have that might interest ICE?
The IRS holds sensitive information including names, addresses, Social Security Numbers (SSNs) or Individual Taxpayer Identification Numbers (ITINs), income sources, employment details, employer identification numbers (EINs), dependents, and financial activity. This data could theoretically be used to identify undocumented immigrants, visa overstayers, or individuals using false documents.

3. What is an ITIN, and why is it relevant to immigration enforcement?
An ITIN (Individual Taxpayer Identification Number) is issued by the IRS to individuals who are not eligible for a Social Security Number but are required to file taxes. Many undocumented immigrants use ITINs to file tax returns. If ICE were to access this data, it could potentially identify undocumented individuals even if they have complied with tax laws.

4. Is it legal for the IRS to share taxpayer information with ICE?
No, under Internal Revenue Code Section 6103, IRS tax return information is confidential and can only be shared with other federal agencies under very limited circumstances, such as specific criminal investigations, and usually with a court order or legal authorization. Broad sharing for immigration enforcement purposes would likely require a change in law or reinterpretation of existing statutes.

5. Has the IRS ever shared information with ICE in the past?
There have been isolated instances where ICE has accessed taxpayer data via court orders, or where other agencies shared IRS-related data in complex criminal cases. However, systematic or routine data sharing between the IRS and ICE has not been documented publicly.

6. Could ICE use IRS data to find and deport undocumented immigrants?
If IRS data were made accessible to ICE, it could theoretically be used to identify noncitizens, including the undocumented, based on employment records, ITIN filings, or mismatched SSNs. However, using tax data for immigration enforcement would raise serious legal and ethical concerns and could undermine the IRS’s ability to collect taxes.

7. Would such data sharing affect people with legal status, like green card holders or visa holders?
Yes. Any noncitizen—such as green card holders, visa holders, and DACA recipients—could be affected if their data indicates immigration violations (e.g., working outside visa terms, overstaying, or misrepresentation). Even lawful immigrants might be scrutinized for technical violations or tax inconsistencies.

8. Could filing taxes using an ITIN expose undocumented immigrants to ICE enforcement?
While the IRS does not currently share ITIN data with ICE, if a new agreement or policy shift occurred, individuals who responsibly filed taxes using ITINs could be at risk. This possibility raises fears that lawful compliance with tax laws could paradoxically increase immigration risk.

9. Would such a deal violate taxpayer privacy rights?
Yes, potentially. Section 6103 was designed to protect taxpayers’ privacy and encourage compliance without fear. Sharing this data with ICE could be seen as a violation of that principle and would likely be challenged in court.

10. How would this affect voluntary tax compliance by immigrants?
Many immigrants—especially undocumented individuals—file taxes to show good moral character, prepare for future legalization, or comply with U.S. law. If they fear this information could be used against them, voluntary tax compliance could plummet, harming both the IRS and broader economic transparency.

11. Could this affect mixed-status families?
Yes. Families with both undocumented and U.S. citizen members may be exposed if ICE uses tax data to trace addresses, dependents, or financial support patterns. This could cause widespread fear even among citizens and lawful residents.

12. How would such a policy impact U.S. employers?
Employers who have unknowingly or knowingly hired undocumented workers could be exposed through payroll data, 1099s, or EIN-related filings. ICE could target these businesses or use them as leads to find unauthorized workers.

13. Could DACA recipients or TPS holders be affected?
Potentially. If their immigration status lapses or is terminated, past IRS data could be used to monitor their compliance with work authorization terms or identify overstays or status violations.

14. What are the risks for people who used false SSNs to work and file taxes?
Many undocumented immigrants have used false or borrowed SSNs to work. If that information is accessible to ICE, they could face charges like identity fraud, misrepresentation, or be placed in removal proceedings. This risk would increase significantly under a data-sharing deal.

15. Could this deal be challenged in court?
Yes. Civil rights and immigration groups would almost certainly file legal challenges under the Privacy Act, constitutional protections, and the Internal Revenue Code. Courts would likely scrutinize such a policy heavily.

16. Would this data-sharing apply retroactively?
That would depend on the specifics of the agreement or policy change. If retroactive access were granted, ICE could review years of tax filings, increasing risks for immigrants who filed in good faith.

17. How could this policy affect tax preparers and accountants?
Tax professionals working with immigrant communities could face ethical and legal dilemmas. They may also face increased scrutiny or fear among their clients. Some might stop assisting undocumented clients altogether.

18. Are there any protections for whistleblowers or people who suspect ICE misuse of tax data?
Protections exist under the IRS Whistleblower Program and certain federal laws. However, uncovering and proving unauthorized data sharing would likely require documentation and legal support.

19. What’s the position of IRS officials on this issue?
Historically, IRS leadership has strongly opposed using tax data for immigration enforcement, arguing it undermines tax administration. However, political appointees or executive orders could override internal resistance.

20. How could a future administration influence this policy?
An administration hostile to immigration could reinterpret existing laws, issue executive orders, or pressure IRS and DHS leadership to facilitate data-sharing. Conversely, a more pro-immigrant administration could issue new safeguards or reinforce data firewalls.

21. Could Congress stop or enable such a deal?
Yes. Congress could pass laws explicitly prohibiting or enabling IRS-ICE data sharing. They could also use funding mechanisms to block or support such enforcement tactics.

22. What should immigrants do now to protect themselves?
Immigrants should:

Consult a trusted immigration attorney.
Avoid using false SSNs or fraudulent documents.
Keep personal information consistent and accurate.
Monitor developments and understand their rights regarding tax data.
Continue filing taxes if they are required to, unless advised otherwise by a lawyer.

23. What’s the role of advocacy groups in this issue?
Immigrant rights organizations are monitoring this closely and may:

File lawsuits or FOIA requests
Educate immigrant communities
Lobby Congress to maintain taxpayer confidentiality
Provide legal clinics and hotlines for affected individuals

24. Could the IRS use immigration status to deny tax benefits?
In limited cases, such as Earned Income Tax Credit (EITC) eligibility, immigration status matters. But generally, tax filing and immigration status are treated separately. A deal with ICE could blur that line, raising concerns about denial of credits or refunds to ITIN filers.

25. What’s the long-term impact of such a policy on public trust?
Sharing IRS data with ICE could severely damage trust in both agencies—especially among immigrant taxpayers. It could lead to lower tax compliance, greater underground economies, and widespread fear, even among those with lawful status.

Bottom Line

This potential IRS-ICE agreement could reshape how immigration enforcement interacts with tax policy—and it raises serious questions about privacy, legality, and fairness. As lawsuits progress and public debate grows, many will be watching closely to see how the Biden-era IRS policies are reversed or reinterpreted under Trump 2.0.

Stay informed, especially if you are an ITIN filer or immigrant taxpayer. Legal challenges are ongoing, and the final outcome of this policy shift is far from certain.

Why You Should Consult with Herman Legal Group

If you’re worried about how your tax filings—especially those involving an ITIN or past use of a false Social Security Number—could affect your immigration status, now is the time to seek experienced legal guidance. With immigration enforcement policies shifting rapidly and discussions around IRS data sharing with ICE raising serious concerns, even well-intentioned taxpayers could face unexpected consequences.

At Herman Legal Group, our attorneys understand the intersection of tax compliance and immigration enforcement. We’ve helped clients from all backgrounds—including undocumented immigrants, visa holders, green card applicants, and mixed-status families—navigate complex legal situations where one misstep could trigger enforcement action or jeopardize a future immigration benefit.

Here’s why choosing Herman Legal Group can make a critical difference:

Experienced in Sensitive Immigration Matters
We handle high-stakes cases involving fraud allegations, identity issues, prior deportations, and status violations—issues that often arise when IRS and immigration matters intersect.
Confidential, Strategic Legal Advice
We provide a safe space to discuss your concerns and develop a proactive strategy to protect your rights—whether you’re filing taxes for the first time or worried about past filings.
Integrated Legal Solutions
Our firm takes a comprehensive approach, working with tax professionals when needed, to ensure you comply with both immigration and tax laws without putting yourself at unnecessary risk.
Nationwide and International Reach
Whether you’re in the U.S. or abroad, our team can assist you through phone, Zoom, or in-person consultations.

Don’t wait for ICE to knock before understanding your legal exposure. If you believe your tax history could be used against you in immigration proceedings—or if you’re unsure whether to file using an ITIN—schedule a confidential consultation with Herman Legal Group today. Our team is here to guide you with compassion, clarity, and a deep understanding of both the law and the lives it affects.

Call Herman Legal Group at 216-696-6170.

Self-schedule your consultation now.

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