IRS to Assist ICE in Locating Immigrants with Deportation Orders

Source: YouTube

The Internal Revenue Service (IRS) is reportedly finalizing an agreement with Immigration and Customs Enforcement (ICE) to assist in locating immigrants who have been ordered to leave the United States. The deal would allow ICE to verify the home addresses of deportation targets by cross-referencing them with confidential IRS records. The move signals a shift in how tax data may be used in government operations.

Terms of the Agreement Between the IRS and ICE

The agreement, still being finalized, would let ICE submit names of individuals it believes to be undocumented and already under deportation orders. The IRS would not directly hand over the data but would instead confirm whether the address ICE has matches what’s on file in its database.
This marks a significant change from past IRS policy. Historically, the agency has refused to share tax-related information with law enforcement without a court order. This separation encouraged tax compliance, even among undocumented immigrants.

That policy helped generate substantial revenue. Undocumented workers paid over $100 billion in taxes in 2022 alone, despite being ineligible for government benefits. Most filed using Individual Taxpayer Identification Numbers (ITINs). The IRS had assured them their data would remain protected.

Drivers of the Policy Change

President Donald Trump’s administration has pushed for broader cooperation between federal agencies in enforcing immigration laws. Earlier this year, the Department of Homeland Security (DHS) requested that the IRS share addresses for 700,000 suspected undocumented immigrants. That request was denied.
The current draft agreement, narrower in scope, applies only to immigrants with active deportation orders. The leadership shift at the IRS, including the replacement of its top legal counsel, has also contributed to the agency’s openness to this new arrangement.

A federal judge recently declined to block the deal, clearing the way for further coordination between the IRS and ICE.

Legal Framework and Concerns

Tax information is typically protected by federal privacy laws. Critics argue that even confirming an address constitutes sharing protected data. Traditionally, such disclosures have required court approval.
Proponents argue that the agreement is limited in scope and consistent with the government’s responsibility to enforce immigration laws. They see it as a tool to improve accuracy in locating individuals with deportation orders.

Opponents, including Democratic lawmakers and civil rights advocates, express concern that the agreement could erode public trust in the IRS. If undocumented immigrants begin to fear that filing taxes could expose them to deportation, compliance could drop, reducing tax revenues.

Impact on Tax Compliance and Government Operations

The longstanding firewall between tax enforcement and immigration operations has supported IRS revenue collection by encouraging undocumented workers to voluntarily file taxes. Undermining that firewall may have broader consequences.
The IRS has warned in the past that turning over data could shrink the tax base and complicate enforcement efforts. The agency relies heavily on voluntary compliance, especially from workers who lack legal status but still contribute to public coffers.

At the same time, DHS has scaled back its internal watchdog functions for immigration enforcement, prompting additional scrutiny of how new enforcement measures will be implemented and overseen.

Broader Implications

Today’s limited agreement could evolve. Legal scholars warn that once a precedent is set, future administrations may expand access to taxpayer data for other purposes. Lawmakers and courts may need to weigh in on where the lines should be drawn.
The IRS-ICE agreement, if finalized, represents a balancing act between national enforcement priorities and the integrity of the tax system. The outcome could influence future policy debates on data privacy, immigration enforcement, and the responsibilities of federal agencies.

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