The IRS has long told taxpayers—citizens and non-citizens alike—that what you file stays sealed. That promise is now under serious strain.
In a new court filing, the Internal Revenue Service acknowledged it improperly disclosed confidential taxpayer information to the Department of Homeland Security as part of a controversial data-sharing agreement aimed at identifying immigrants living in the U.S. without legal status. The admission lands in the middle of ongoing litigation and intensifies concerns over privacy, federal overreach, and the sanctity of tax records.
What the IRS Admitted in Court
According to a declaration filed by IRS Chief Risk and Control Officer Dottie Romo, Immigration and Customs Enforcement (ICE) submitted roughly 1.28 million names to the IRS for verification. Of those, about 47,000 names were verified and disclosed back to ICE.
More significantly, the IRS provided additional address information for under 5% of those verified names. That disclosure, Romo said, may have violated strict taxpayer confidentiality protections under federal law.
Here’s how the numbers break down:
| Category | Figures Disclosed |
|---|---|
| Names submitted by ICE | 1.28 million |
| Names verified by IRS | ~47,000 |
| Additional addresses shared | Under 5% of verified names |
The Treasury Department notified DHS of the error last month and requested assistance in “promptly taking steps to remediate the matter consistent with federal law,” including the appropriate disposal of improperly shared data.
The IRS says it recently discovered the mistake and is now working to correct it.
The Controversial IRS–DHS Agreement
The data-sharing arrangement was finalized last spring between the Treasury Department, the IRS, and DHS. It allowed immigration authorities to submit names and addresses to the IRS for cross-verification against tax records.
This marked a significant departure from longstanding IRS practice.
For decades, the IRS has operated under strict confidentiality rules under Internal Revenue Code Section 6103, which limits disclosure of taxpayer information. The law exists specifically to protect the privacy of individuals who file taxes—even undocumented immigrants who use Individual Taxpayer Identification Numbers (ITINs).
The IRS outlines taxpayer privacy protections here: https://www.irs.gov/privacy-disclosure/irs-privacy-policy
Historically, the agency maintained a firewall between tax enforcement and immigration enforcement. That firewall was meant to encourage tax compliance across communities by assuring filers that their information would not be used for deportation purposes.
The agreement changed that dynamic—and quickly sparked backlash.
Legal Fallout and Court Rulings
The data-sharing deal triggered lawsuits almost immediately.
Immigrant rights groups filed suit against Treasury Secretary Scott Bessent and Homeland Security Secretary Kristi Noem, arguing the agreement violated taxpayer confidentiality laws and undermined public trust in the tax system.
Last week, a federal judge ordered the IRS to stop disclosing residential addresses to ICE, marking the second ruling blocking enforcement of the agreement.
In November, another federal judge ruled that the IRS had illegally disseminated tax data to DHS over the summer, citing violations of federal confidentiality statutes.
For reference, federal taxpayer confidentiality law can be found in 26 U.S. Code § 6103 at https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title26-section6103.
The courts have made clear that disclosure of tax data is tightly restricted and cannot be expanded without clear statutory authority.
Why This Matters Beyond Immigration
This isn’t just an immigration story. It’s a tax compliance story.
The IRS processes more than 160 million individual returns annually, according to official statistics at https://www.irs.gov/statistics. Voluntary compliance is the backbone of the U.S. tax system. People file because they trust the rules.
If taxpayers believe their data could be repurposed beyond tax administration, that trust erodes.
Advocacy groups warn that once confidential data crosses agency lines, errors are inevitable.
“Once taxpayer data is opened to immigration enforcement, mistakes are inevitable and the consequences fall on innocent people,” Tom Bowman, policy counsel for the Center for Democracy & Technology, told The Associated Press. “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.”
Privacy experts also point out that incorrect address matches or incomplete data could affect U.S. citizens or lawful residents who share similar names.
Resignations and Internal Turmoil
The agreement reportedly led to the resignations of top IRS officials, underscoring how controversial the decision was internally.
Within the agency, career staff have historically guarded Section 6103 protections fiercely. Any deviation tends to trigger internal alarm bells because breaches carry not just civil liability but potential criminal consequences.
Now, with the IRS acknowledging improper disclosures in court filings, scrutiny is intensifying.
What Happens Next?
The Treasury Department has asked DHS to dispose of any improperly shared data. Whether that fully mitigates the damage is unclear.
Ongoing litigation will likely determine:
- Whether the original agreement was lawful
- Whether affected individuals are entitled to remedies
- Whether additional safeguards will be imposed
Congress could also become involved if lawmakers push for clearer statutory boundaries between tax enforcement and immigration enforcement.
At stake is more than a bureaucratic misstep. It’s the integrity of the tax system itself.
The IRS depends on voluntary reporting. And voluntary reporting depends on trust. Once that trust cracks—even slightly—it’s hard to restore.
FAQs
Q. What did the IRS disclose to DHS?
The IRS verified roughly 47,000 names submitted by ICE and provided additional address information for under 5% of those individuals.
Q. Why is the data-sharing controversial?
Federal law strictly limits disclosure of taxpayer information. Critics argue the agreement violated longstanding confidentiality protections.
Q. Did a court block the IRS-DHS agreement?
Yes. Federal judges have issued rulings blocking the IRS from sharing certain taxpayer data with DHS.
Q. What law protects taxpayer confidentiality?
Internal Revenue Code Section 6103 restricts disclosure of taxpayer information except under specific circumstances.
Q. Could U.S. citizens be affected?
Advocates warn that errors in data matching could potentially impact citizens or lawful residents who share similar names.
