The Internal Revenue Service (IRS) is reportedly close to finalizing an agreement with the Department of Homeland Security (DHS) that would allow U.S. Immigration and Customs Enforcement (ICE) to use taxpayer data to help locate individuals suspected of living in the U.S. without legal status. The deal, still under internal review, is seen as part of former President Donald Trump’s renewed push for aggressive deportation measures during his campaign.
Under the proposed plan, ICE would be required to submit specific names and addresses of individuals they suspect to be undocumented migrants. The IRS would then cross-reference its records and confirm whether the information matches, rather than directly handing over taxpayer data. This marks a significant procedural and policy shift for the agency.
Previously, an early draft of the agreement circulated by DHS was broader, requesting sweeping access to data about hundreds of thousands of individuals who had filed taxes using Individual Taxpayer Identification Numbers (ITINs). That proposal drew sharp criticism from privacy advocates and civil liberties groups. The latest draft is narrower, focused solely on confirming data provided by DHS, but critics remain concerned.
ICE requests under the agreement would require formal authorization by either DHS Secretary Kristi Noem or acting ICE Director Todd Lyons. Each request would need to include the name and address of the taxpayer along with a removal order—an attempt to provide a legal framework for the data verification process.
Proponents of the plan argue that it would strengthen immigration enforcement efforts by allowing ICE to act on reliable intelligence. “This is about enforcing immigration laws using the best data available,” said one government official familiar with the matter. Supporters also point to national security concerns and the need to track individuals with existing removal orders.
However, privacy experts, immigration advocates, and civil rights groups are alarmed. They argue the agreement could undermine public trust in the tax system and discourage undocumented migrants from filing tax returns—a process the IRS has long encouraged, even for individuals without legal status. “This is a bad precedent that can make individuals reluctant to obey tax laws,” said a spokesperson from the ACLU.
Earlier this month, two immigration rights organizations based in Chicago filed a federal lawsuit against the Treasury Department and the IRS, seeking to block any such agreement. The plaintiffs argue that federal law prohibits the IRS from sharing taxpayer data with agencies like ICE or DHS, which are not listed among the exceptions under the tax code’s strict confidentiality protections.
IRS records have traditionally been among the most protected data in the federal government. The agency’s confidentiality rules are central to its ability to collect voluntary tax filings without fear of surveillance or misuse.
The Biden administration has so far remained silent on the proposal, and it’s unclear whether the pact will move forward or be delayed by legal challenges.
For millions of undocumented immigrants living in the United States, the potential data-sharing agreement represents more than just a policy change—it could reshape how immigration enforcement intersects with basic tax compliance, introducing new risks into an already precarious legal landscape.
