IRS Improperly Shared Confidential Immigrant Tax Data With Homeland Security, Court Filing Reveals

The Internal Revenue Service improperly disclosed confidential taxpayer information of thousands of individuals to the Department of Homeland Security as part of a controversial data-sharing agreement aimed at identifying undocumented immigrants, according to a new court filing.

In a declaration filed Wednesday, IRS Chief Risk and Control Officer Dottie Romo revealed that the tax agency verified approximately 47,000 of the 1.28 million names submitted by Immigration and Customs Enforcement (ICE) for cross-verification against tax records. The IRS then provided additional address information for less than 5% of those names to ICE, potentially violating federal privacy protections designed to safeguard taxpayer data.

The Treasury Department, IRS, and DHS finalized this agreement last spring, authorizing ICE to submit names and addresses of immigrants suspected of being in the country illegally for verification against tax records. The controversial move led to the resignations of several top IRS officials who opposed the policy change.

The tax collection agency stated it recently discovered the error and has notified DHS of the breach. According to Romo, Treasury officials asked DHS last month for assistance in “promptly taking steps to remediate the matter consistent with federal law,” including the “appropriate disposal of any data provided to ICE by IRS based on incomplete or insufficient address information.”

This data-sharing arrangement marked a significant departure from longstanding IRS policy that encouraged all immigrants to pay taxes regardless of their legal status by assuring them their information would remain confidential. This policy shift has sparked concerns about potential chilling effects on tax compliance among immigrant communities.

The agreement has faced significant legal challenges since its implementation. A coalition of immigrant rights groups filed a lawsuit against Treasury Secretary Scott Bessent and Homeland Security Secretary Kristi Noem shortly after the agreement was signed.

Legal setbacks for the program have mounted in recent months. Just last week, a federal judge ordered the IRS to halt the disclosure of residential addresses to ICE, marking the second judicial ruling blocking the interagency agreement. In November, a different federal judge issued a similar order, stating the IRS had illegally disseminated tax data of some migrants over the summer in violation of taxpayer confidentiality laws.

Privacy advocates have expressed alarm about the implications of these disclosures. “Once taxpayer data is opened to immigration enforcement, mistakes are inevitable and the consequences fall on innocent people,” said Tom Bowman, policy counsel for the Center for Democracy & Technology. “The disclosure of thousands of confidential records unfortunately shows precisely why strict legal firewalls exist and have—until now—been treated as an important guardrail.”

The controversy highlights the tensions between the Trump administration’s aggressive immigration enforcement agenda and longstanding legal protections for taxpayer privacy. The Internal Revenue Code has historically maintained strict confidentiality provisions for tax return information, with limited exceptions that many legal experts argue do not extend to broad immigration enforcement purposes.

For decades, the IRS has encouraged all residents, regardless of immigration status, to file tax returns. Many undocumented immigrants file using Individual Taxpayer Identification Numbers (ITINs) specifically created for those without Social Security numbers. This system has allowed the federal government to collect billions in tax revenue from undocumented workers while maintaining the firewall between tax administration and immigration enforcement.

Critics of the data-sharing agreement argue that breaking down this barrier threatens not only privacy rights but also the integrity and efficiency of the tax system itself by discouraging compliance among vulnerable populations. Supporters counter that the agreement represents a legitimate use of government resources to enforce immigration laws.

As legal challenges continue, the inadvertent disclosure of thousands of taxpayer records adds new fuel to the debate over the proper balance between immigration enforcement and taxpayer privacy protections.