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A federal judge has ruled that the Internal Revenue Service (IRS) violated the law by disclosing confidential taxpayer information to Immigration and Customs Enforcement (ICE) “approximately 42,695 times.”
In a ruling issued Thursday, U.S. District Judge Colleen Koller Kotelly found that the IRS incorrectly shared taxpayer information for thousands of people, in clear violation of the Internal Revenue Code.
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The ruling cites IRS Code 6103, one of the strictest confidentiality laws in federal statutes, which primarily prohibits disclosure of tax return information without consent.
Koller-Kotely said the IRS violated the law “approximately 42,695 times by disclosing a taxpayer’s last known address to ICE.”
“Not only did the IRS fail to ensure that ICE’s request for confidential taxpayer address information met statutory requirements, but this failure resulted in the IRS disclosing confidential taxpayer addresses to ICE in circumstances where ICE’s request for information was clearly inadequate,” she wrote.
Her findings were based on a filing earlier this month by Dottie Romo, the IRS’ director of risk management, that revealed the IRS provided the Department of Homeland Security (DHS) with information on 47,000 of the 1.28 million people requested by ICE.
In most of these cases, the tax agency provided additional address information to ICE in violation of privacy rules put in place to protect taxpayer data, Romo said.
The government is appealing the case, but Thursday’s ruling is significant because Romo’s declaration supports the appellate court’s decision.
Meanwhile, Koller Kotelly called the Romo declaration “an important development in this matter.”
What agreement does the IRS have with ICE?
The lawsuit is the result of increased efforts to consolidate government data under President Donald Trump’s administration, alarming rights advocates concerned about infringing on taxpayer privacy.
Some of that data was used to carry out a campaign of mass deportations, a key pillar of President Trump’s second-term policies.
On April 7, the IRS signed a memorandum of understanding with the Department of Homeland Security to support “non-tax criminal enforcement.”
However, the agreement was widely understood to be the basis for identifying and deporting immigrants in the United States through taxpayer data.
The Taxpayer Rights Center sued the government over the disclosure, citing safeguards put in place after the 1972 Watergate scandal revealed how former President Richard Nixon misused tax data during his term.
“This nation has already experienced one president who sought to collect tax information on political allies and enemies from the White House for advantage and punishment,” the center wrote in its original complaint.
“After Watergate, Congress acted clearly and unequivocally to protect the American people from these intrusions.”
It argued that taxpayer data is so sensitive that it is “at grave risk” to be shared widely across the government.
“This confirms what we have said all along: that the IRS has an unlawful policy that violates the protections of the Internal Revenue Code by releasing these addresses in a manner that violates the requirements of the law,” Nina Olson, founder of the Taxpayer Rights Center, said after Thursday’s ruling.
Representatives from the IRS and Treasury Department did not respond to requests for comment from The Associated Press.
Currently, data-sharing agreements allow ICE to illegally submit the names and addresses of immigrants in the United States to the IRS for cross-verification with tax records.
The agreement was signed by Treasury Secretary Scott Bessent and Homeland Security Secretary Kristi Noem, and the then-acting IRS chief was forced to resign.
Several lawsuits are underway challenging agreements between the IRS and immigration authorities.
Earlier this week, a three-judge panel of the U.S. Court of Appeals for the D.C. Circuit declined to issue a preliminary injunction against the federal government, which is suing the immigrant rights group Centro de Trabajadores Unidos and other nonprofit groups seeking to block implementation of the agreement.
In denying the request for a preliminary injunction, Judge Harry T. Edwards said the nonprofits are “unlikely to succeed on their claims” because the information they share is not covered by IRS privacy laws.
Still, two separate court orders blocked large-scale transfers of taxpayer information by government agencies and prevented ICE from acting on IRS data in its possession. These preliminary injunctions remain in effect.
