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Lawsuit Challenges Trump Administration Plan to Share Tax Data With ICE

Watchdogs warn of surveillance expansion as ICE and the IRS finalize a data-sharing deal targeting undocumented workers.

President Donald Trump meets with U.S. ambassadors in the cabinet room of the White House in Washington, D.C., on March 25, 2025.

As leading Democrats in Congress demand the Trump administration publicly release its reported plan to use taxpayer data to track down and deport undocumented workers, watchdog groups are warning that the surveillance state is being stretched beyond the limits of federal law.

The Internal Revenue Service (IRS) is reportedly nearing an agreement that would allow federal immigration police to use private taxpayer data for confirming names and addresses of people they suspect are undocumented. Under the agreement, which has been under negotiation for weeks amid a chaotic staffing shakeup at the IRS and was first reported by the Washington Post, top Department of Homeland Security (DHS) officials would send names and addresses of suspected undocumented people to the IRS to cross-reference against its own confidential database of taxpayer records — records that workers have long trusted the government to keep private.

Democrats and privacy advocates argue that the unprecedented use of IRS data for immigration enforcement would undermine public trust in the tax system and violate privacy laws passed by Congress after President Richard Nixon’s administration attempted to weaponize IRS records against political enemies decades ago. The Trump administration has yet to publicly reveal the details of the agreement, which could face legal challenges.

“The IRS is not supposed to share this type of information. That is long-standing federal law, and everyone as taxpayers should be concerned that now the Trump administration is trying to do away with that by targeting a specific group of people,” said Vanessa Cárdenas, executive director of the immigration reform group America’s Voice, in an interview.

Last month the IRS denied a request from DHS for the names, addresses, phone numbers and email addresses of 700,000 people the Trump administration suspects of being undocumented. However, senior IRS officials have since left the agency, which President Donald Trump has staffed with allies likely to push through his own political priorities.

Nandan Joshi, an attorney with Public Citizen Litigation Group, which is representing immigrant rights groups in a federal lawsuit against the IRS, said both agencies have prepared a legal workaround in an attempt to skirt well-established federal privacy laws.

“The protections that are afforded to taxpayer records apply across the board,” Joshi said in an interview. “It doesn’t matter whether you are a legal citizen or undocumented, you are protected. The law doesn’t make distinctions there.”

Personal tax information — including names and addresses — is illegal to disclose and has long been closely guarded by the IRS. Joshi said the exodus of longtime IRS staffers under Trump’s purge of the federal civil service has stifled resistance to legally dubious policies.

“If the courts don’t stop them, if they are able to implement this plan, that will just embolden them to try something more aggressive next time.”

“Institutionally, in the past, [the IRS has] been very good about the protection of the secrecy of taxpayer information,” Joshi said in an interview. “But obviously those people are getting fired or laid off, and their managers are being replaced by people who want to accommodate the administration’s interests, so it seems like they are rapidly tearing down those barriers.”

Cárdenas said working and living in the U.S. without documents is typically a civil violation, not a criminal one, and many undocumented people have for years paid taxes with the understanding that their information is protected under the law. For years, the IRS has encouraged undocumented workers to pay income taxes by assigning tax numbers in lieu of Social Security numbers with assurances that personal information would remain confidential.

“These are people who want to get right by the law and play by the rules, but for the government to go after them sends a really troubling message to all Americans and to this community especially,” Cárdenas told Truthout. “This is actually going to hurt all of us because the incentive to pay taxes isn’t going to be there with tax season just around the corner.”

Democrats are also slamming Trump over threats to the economy and civil liberties posed by the immigration crackdown. Sen. Alex Padilla of California, the ranking Democrat on the Senate Judiciary Immigration Subcommittee, released a joint statement with Sen. Ron Wyden (D-Oregon) and Sen. Catherine Cortez Masto (D-Nevada) on Monday demanding that the IRS and DHS disclose the information sharing agreement and brief Congress immediately.

“This agreement between the IRS and DHS — if finalized — will have long-lasting and devastating implications on our economy, taxpayer privacy, immigrant communities, and the rule of law,” the senators said.

While the final agreement has not been released despite requests by Senate Democrats for more information, a draft memo obtained by the Washington Post indicates that DHS and Immigration and Customs Enforcement (ICE) would be allowed access to the names and addresses in IRS records for immigrants with current removal orders. Of the estimated 11 million undocumented people living in the U.S., more than 1.4 million are currently subject to removal orders.

According to the memo, requests for confirming names and addresses with the IRS could be submitted only by Homeland Security Secretary Kristi L. Noem or acting ICE Director Todd Lyons, who were appointed by Trump to orchestrate the mass deportation campaign.

Joshi said advocates were aware of plans to use the IRS for immigration enforcement thanks to Project 2025, the far right policy blueprint that Trump disavowed on the campaign trail before embracing its ideas once in office. After learning about the initial DHS request for taxpayer data, the Public Citizen Litigation Group filed a lawsuit against the IRS seeking an emergency order to block the sharing of private information with DHS on March 7. On Wednesday, the group amended the lawsuit to add the DHS, ICE, Noem and Lyons to the list of defendants.

Joshi said the IRS told the court it would implement the data-sharing agreement within the bounds of exemptions created by Congress in privacy law, and last week the court refused to issue an order blocking the IRS from working with DHS. Attorneys are still waiting on the administration to release the final policy — or to block information about it from becoming public — before pursuing further legal challenges, but Joshi said that if the Washington Post report is accurate, then the plan to use IRS data for immigration enforcement still violates the law.

“These protections were actually put in place after Nixon because he abused IRS records for his political ends, so they have been in place for about 50 years,” Joshi said. “Even Donald Trump fought to keep his tax records private. So everyone believes that tax records are supposed to be confidential, and that is what the law says.”

Joshi said the law contains exemptions for high-profile criminal investigations, in which investigators may receive permission to use IRS records from a federal court. However, Joshi says the Trump administration is purposefully conflating criminal and immigration enforcement in order to “shoehorn” the IRS and DHS agreement into legal exemptions designed for specific criminal investigations in service of a mass deportation dragnet.

“Trump has characterized every undocumented person as a criminal, or his administration has, which is not true,” Joshi said. “Who knows what their next step is. If the courts don’t stop them, if they are able to implement this plan, that will just embolden them to try something more aggressive next time.”

Cárdenas said casting an entire segment of the population as criminals who must be surveilled is part of a larger, dangerous pattern as the Trump administration reaches for justifications for its brutal immigration policies. As a Latina immigrant, she is already seeing the impacts as visa holders, legal permanent residents, and even U.S. citizens who are often Black, Brown or Native American are targeted and swept up in Trump’s crackdown, which is causing dangerous overcrowding in immigration jails.

“It’s also deeply frustrating that people don’t see the signs that we are seeing, but from our perspective this is the canary in the coal mine,” Cárdenas said. “It’s starting with us, but when is it going to be enough? Who is going to be next?”

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