A federal judge has ruled that the Internal Revenue Service unlawfully disclosed confidential taxpayer information to Immigration and Customs Enforcement (ICE) nearly 43,000 times, intensifying scrutiny over a controversial data-sharing agreement between tax and immigration authorities.
Court Finds Violations of Federal Privacy Law
U.S. District Judge Colleen Kollar-Kotelly determined Thursday that the IRS violated Section 6103 of the Internal Revenue Code — one of the strictest taxpayer confidentiality statutes in federal law — by providing last known taxpayer addresses to ICE approximately 42,695 times.
The ruling stems from a declaration filed earlier this month by Dottie Romo, the IRS’s chief risk and control officer. According to that filing, the agency responded to 47,000 requests from the Department of Homeland Security (DHS) out of 1.28 million individuals ICE sought to verify. In most of those cases, the IRS disclosed additional address information that the court found did not meet statutory safeguards.
Judge Kollar-Kotelly described the declaration as a “significant development” and concluded that the IRS failed to ensure ICE’s requests satisfied legal requirements before releasing protected information.
Data-Sharing Agreement Under Fire
The disclosures occurred under a formal data-sharing agreement signed in April by Treasury Secretary Scott Bessent and Homeland Security Secretary Kristi Noem. The agreement allows ICE to submit names and addresses of suspected undocumented immigrants for verification against IRS tax records.
The policy sparked internal turmoil within the tax agency, including the resignation of its then-acting commissioner.
Advocacy organizations have argued that the agreement undermines long-standing assurances that taxpayer information would not be used for immigration enforcement, except under narrow circumstances defined by law.
Ongoing Appeals and Legal Challenges
The federal government is appealing the ruling. However, the judge’s findings are expected to weigh heavily in appellate proceedings because they rely on sworn internal documentation from IRS leadership.
The case is one of several legal battles challenging the IRS-DHS agreement. Earlier this week, a three-judge panel of the U.S. Court of Appeals for the D.C. Circuit declined to grant a preliminary injunction requested by immigrant rights organizations, including Centro de Trabajadores Unidos.
In that decision, Judge Harry T. Edwards wrote that the nonprofit plaintiffs were unlikely to succeed on the merits of their claim, suggesting that the specific data being shared might not fall under certain privacy protections.
Despite that setback for advocacy groups, two separate court orders remain in effect. Those preliminary injunctions prohibit large-scale transfers of taxpayer data and prevent ICE from acting on IRS information currently in its possession.
Reaction from Advocates
Nina Olson, founder of the Center for Taxpayer Rights, said the ruling confirms longstanding concerns about the legality of the IRS policy.
She argued that the agency adopted an unlawful interpretation of the tax code that enabled disclosures beyond what Congress authorized.
Neither the IRS nor the Treasury Department immediately responded to requests for comment.
Broader Implications for Taxpayer Privacy
Section 6103 of the Internal Revenue Code strictly limits when and how taxpayer information may be disclosed, with violations carrying potential civil and criminal penalties. The statute has historically been regarded as a cornerstone of public trust in the U.S. tax system.
Legal experts say the case could reshape how federal agencies collaborate on immigration enforcement and redefine the boundaries between tax administration and homeland security operations.
As appeals proceed, the dispute is poised to test the balance between immigration enforcement objectives and long-standing federal privacy protections.