The IRS Just Agreed to Share Data With ICE. What Does That Mean for Our Community?
The Internal Revenue Service has quietly entered a new era—and immigrant communities are bracing for impact. On Monday, the IRS signed a memorandum of understanding with U.S. Immigration and Customs Enforcement (ICE) that allows immigration officials to access taxpayer data in certain criminal cases.
This agreement marks a dramatic policy shift. For decades, the IRS had a reputation for keeping tax data confidential—even for undocumented immigrants. Now, many are asking: What does this mean for our communities, our safety, and our future?
Why the IRS Sharing Taxpayer Info With ICE Is a Big Deal
According to Axios, the IRS has agreed to share immigrants’ personal tax return information with ICE when requested during criminal investigations. This includes addresses and financial details that, for many undocumented taxpayers, have long felt protected.
Under the agreement, ICE must prove that the individual in question is under criminal investigation or has a final order of removal. The IRS then cross-checks its records for relevant tax return data. Yet the exact scope of what will be shared remains unclear. Many details in the agreement were redacted in public filings.
According to the Associated Press, IRS Acting Commissioner Melanie Krause is resigning over the deal. She is the second IRS head to step down in recent months amid concerns over government overreach and data misuse. The previous acting commissioner, Douglas O’Donnell, left in February. He did so following public outcry over Elon Musk’s Department of Government Efficiency gaining access to taxpayer data.
What this Deal Means for Immigrant Communities
Undocumented immigrants contribute billions in taxes each year, often using Individual Taxpayer Identification Numbers (ITINs). For years, immigrant advocates and tax professionals have worked to assure these taxpayers that their information would remain confidential.
Now, that promise is in jeopardy. “The IRS’s decision to share confidential information with the Department of Homeland Security threatens the safety of thousands of workers while forcing them further into the shadows,” Murad Awawdeh of the New York Immigration Coalition told NPR.
Tom Bowman from the Center for Democracy and Technology told the Associated Press the agreement “will discourage tax compliance among immigrant communities, weaken contributions to essential public programs, and increase burdens for U.S. citizens and nonimmigrant taxpayers.”
According to NPR, dozens of congressional Democrats sent a letter urging the IRS and DHS not to finalize the deal. They warned that it would drive undocumented taxpayers away from formal tax systems. It would also shift more of the labor force to the informal economy, and potentially lower federal tax revenue.
IRS and ICE Officials Say It’s About Criminal Investigations—But Critics Aren’t Convinced
Trump-era immigration officials argue that the IRS-ICE agreement targets serious criminal cases. “This is about protecting social security for the American people,” said former Border Czar Tom Homan.
DHS Assistant Secretary Tricia McLaughlin echoed that in a statement. She claims the information sharing will help identify public safety threats, voter fraud, and unauthorized benefit use. Acting ICE Director Todd Lyons told reporters that the agency is targeting immigrants “hiding in plain sight” and using false identities.
But advocacy groups and privacy experts say this justification is thin. The NYU Tax Law Center warned the agreement “threatens to violate the rights that many more Americans have under longstanding laws that protect their tax information.” The IRS’s own memo acknowledges that officials who misuse this information could face legal consequences.
The IRS Is Sending a Message—And Immigrants Are Listening
While the Treasury Department insists the deal is rooted in long-established legal authority, immigrant advocates say the damage has already begun. Fear and mistrust are spreading.
“Instead of punishing people who contribute and comply with our tax laws, our government should be working to protect their rights and build trust,” said Awawdeh.
With the IRS now aligned with ICE in new ways, it remains to be seen how this will affect tax filings in immigrant-heavy communities, especially as tax season wraps up. For many, the message is clear: what was once safe may no longer be.
As NPR reported, it’s still unclear when the information sharing will begin. But for now, it marks a turning point that could reshape how immigrants interact with federal agencies for years to come.
