IRS discloses immigrant tax data to DHS
The IRS disclosed address information of certain immigrants to the Department of Homeland Security under a 2025 data-sharing agreement.
In a recent Court filing, the IRS acknowledged it improperly provided additional address details in some cases. The disclosures stemmed from an April 2025 interagency agreement allowing limited information sharing for non-tax criminal investigations. The admission comes while federal courts have temporarily blocked further data sharing.
The issue raises questions about the extent of §6103 confidentiality protections when immigration enforcement is involved.
The Law in Play
The governing statute is §6103 of the Internal Revenue Code, which protects tax return information from disclosure. The rule is strict. Exceptions are narrow. One exception permits disclosure of information in non-tax criminal investigations when certain requirements are met.
ICE requested address information for individuals under investigation. Under the agreement, the IRS could confirm whether an address provided by ICE matched its records. The agency was not authorized to supplement incomplete data with additional address details.
According to the Court filing, ICE requested 1.28 million addresses. The IRS verified 47,289 individuals. In fewer than 5 percent of those verified cases, the IRS provided additional address information where ICE’s request lacked complete data.
Critics argue the agreement stretched the intent of §6103. The government maintains that immigration-related investigations can qualify under the criminal investigation exception.
Timeline
April 2025: The IRS and DHS finalized a data-sharing agreement for non-tax criminal investigations.
Spring 2025: Immigration and taxpayer advocacy groups filed suit challenging the agreement.
Mid-2025: Two federal judges issued temporary injunctions blocking further disclosures.
Late 2025: The government appealed the injunctions.
February 2026: The IRS disclosed in Court filings that it improperly overshared some address information.
Present: Data sharing remains paused pending appellate review.
The Larger Story
Tax administration depends on voluntary compliance. That compliance rests on the expectation that return information remains confidential except in defined circumstances.
Immigrants, including those without lawful status, are required to file federal returns if they meet income thresholds—many file using an Individual Taxpayer Identification Number rather than a Social Security number.
When tax data overlaps with immigration enforcement, tensions in policy arise. The IRS is bound by confidentiality rules, while DHS has an enforcement mandate. An agreement tried to connect these missions via a statutory exception, but litigation indicates the connection may not be sustainable.
The episode also highlights operational risk. Even when disclosure is authorized, internal controls must prevent overreach. The IRS must now explain how the verification process enabled the transmission of additional address details.
What It Means in Practice
Review client communications regarding confidentiality under §6103. Clients may seek reassurance about how return information is used.
Monitor litigation developments that could clarify the scope of the criminal investigation exception.
Advise immigrant clients on current filing obligations. Filing requirements remain unchanged despite the injunction.
Evaluate documentation procedures for ITIN filers to ensure records are accurate and complete.
Expect increased scrutiny of IRS disclosure controls in future audits or congressional oversight.
Next Steps
The appellate courts will determine whether the injunctions remain in place. Further briefing is expected on whether the agreement complies with §6103. The IRS may also face oversight inquiries regarding its internal disclosure controls and notification practices.
One More Thing
The dispute shows how a narrow statutory exception can reshape taxpayer behavior when enforcement priorities shift.