Earlier this week, the Internal Revenue Service (IRS) publicly disclosed a memorandum of understanding with U.S. Immigration and Customs Enforcement (ICE), agreeing to share taxpayer data for undocumented immigrants under federal criminal investigation. The deal, signed by Treasury Secretary Scott Bessent and Homeland Security Secretary Kristi Noem, reflects a shift in agency policy and aligns with President Donald Trump’s broader immigration enforcement strategy.
The agreement, which is effective immediately, allows ICE to request taxpayer information—such as names, addresses, and tax periods—specifically for individuals under investigation for crimes like illegal reentry or failing to comply with final removal orders. The IRS will verify these details against records submitted by immigrants using Individual Taxpayer Identification Numbers (ITINs). In 2023, such filers contributed nearly $56 billion in federal taxes, according to the American Immigration Council. The new policy channels that data into enforcement tools, though access is currently restricted to Secretary Noem and Acting ICE Director Todd Lyons, with the possibility of limited delegation.
President Trump called the policy “a big win for American safety” during an April 8 press briefing, framing it as part of his promise to initiate the largest deportation effort in U.S. history. A Treasury spokesperson defended the agreement, citing Section 6103 of the Internal Revenue Code, which permits disclosures for non-tax criminal investigations when authorized by top officials. Portions of the 15-page agreement remain redacted, but Treasury says the deal will help streamline enforcement operations.
Critics argue the move may damage longstanding trust between the IRS and immigrant communities. “For 30 years, we told immigrants their tax info was safe—now it’s a weapon,” a former IRS official told The Washington Post. Murad Awawdeh of the New York Immigration Coalition warned that the policy could drive undocumented workers away from tax compliance. Analysts at the Institute on Taxation and Economic Policy estimate federal revenue losses could total billions if filing rates among undocumented immigrants were to fall dramatically.
Legal challenges are already underway. Public Citizen, representing Centro de Trabajadores Unidos, is seeking an injunction in federal court, arguing the agreement bypasses legal standards requiring court orders for data sharing.
Inside the IRS, the rollout has sparked internal friction. Acting Commissioner Melanie Krause, who took over after Doug O’Donnell’s resignation in February, is reportedly planning to step down, citing frustrations with being excluded from key decisions. Some sources claim up to 50 senior IRS IT staff were placed on leave on April 4, though Treasury denies these personnel changes are connected to the ICE agreement.
The policy has also raised concerns about due process and data reliability. Critics say the administration’s methods for identifying potential deportees—including the presence of tattoos—could lead to mistaken detentions. ICE, however, insists the individuals have been properly vetted. While ICE has cited a growing backlog of deportation cases, critics argue the new data-sharing mechanism could deepen fears and erode cooperation with government agencies.
As lawsuits move forward and immigrant communities weigh the risks of filing taxes, the IRS-ICE agreement represents a new chapter in federal enforcement—one poised to influence tax behavior, legal precedent, and the broader immigration debate in the months ahead.
Image is in the public domain and was created by Carol M. Highsmith.
