The Department of Homeland Security said in a court document that the IRS has agreed to share certain tax information filed by undocumented taxpayers with Immigration and Customs Enforcement.
The announcement of the agreement came in a document filed late Monday in a case challenging the legality of the IRS sharing tax information with other agencies. The document was filed with several key parts blacked out.
“There is an agreement that calls for information sharing, which is a reversal of what IRS said in the past it would not share,” said Alan Morrison, an attorney at Georgetown School of Law who is of counsel on the case challenging the lawsuit. The attorneys in the lawsuit are asking the DHS to file a clean copy, without redactions.
The DHS has sought to use tax filing information to find people in the United States without legal status in support of President Donald Trump’s mass deportation operation.
Many people without legal status pay billions in taxes, filing under tax identification numbers. The Institute on Taxation and Economic Policy estimated that undocumented immigrants paid $96.7 billion in federal, state and local taxes in 2022. According to its analysis, $59.4 billion went to the federal government and $37.3 billion to state and local governments.
It is illegal to release personal tax information and the IRS has long refused to share identities of undocumented taxpayers with other agencies.
But the law provides some specific exceptions, including information for investigations not related to taxes and involving claims the individual is in violation of or suspected of being in violation of federal criminal law.
Morrison said “so far as we can tell,” the deal is limited to that exception.
“We are challenging whether they can share the information (by) trying to claim exception for criminal investigations,” he said. “But we think what they really want is location information and you need a court order for that.”
For months, IRS officials have resisted disclosing what has long been guarded information, but Trump has replaced the agency’s leadership with staff more friendly to his taxpayer information sharing plan.
“The government filed this at 11:10 last night. We have three days to respond. They hatched the agreement that they say is complete, but it is significantly redacted. It is impossible to tell what the impact is without knowing more,” Morrison told NBC News.
He said that when he first tried to read the DHS’ filing, “I couldn’t figure out what kind of words were missing … How can we possibly know what they are doing if we have not seen this?” he asked.
The Department of Homeland Security did not respond to an NBC News request for comment and for information on the redacted portions of the agreement.
According to the DHS’ court filing, ICE, in its requests to the IRS, must ask for the name and address of the person whose information it wants, the tax periods relating to its request, the federal criminal statute under which the individual is being investigated or relating to any nontax-related criminal proceeding involving the individual, and reasons why disclosing the information might be relevant to the nontax-related criminal investigation or proceeding.
He said the DHS has identified two possible crimes that would authorize the IRS to share the information with ICE. But he said the DHS hasn’t said what crimes it has identified or whether it has names of people who have committed or are suspected of committing those crimes, which it must have to get the information.
“One thing they said, so far at least as of yesterday, there were no pending requests for this information and if they do request it, they have to go through some processing,” he said.
The agreement was reached only after several months of upheaval at the IRS and pressure from the administration, including by Elon Musk’s DOGE operation.
The agreement is certain to generate more terror among immigrants, many of whom have paid taxes for years to ensure they were not violating U.S. law and jeopardizing potential future opportunities for legal status.
Rep. Jimmy Gomez, D-Calif., a member of the House Ways and Means Committee which has jurisdiction over taxes, said in a news release that “the IRS should never be weaponized to target immigrant families … No one should fear that filing their taxes puts their family at risk.” Gomez, whose parents are Mexican immigrants, added that he’ll try to stop the measure through the committee.
