The IRS and DHS have finalized a historic information-sharing agreement to help locate and deport illegal immigrants, prompting the IRS acting commissioner to resign in protest amid growing controversy over privacy concerns.
Quick Takes
- A memorandum of understanding between DHS and IRS now allows ICE to access taxpayer information to locate illegal immigrants with final deportation orders.
- Acting IRS Commissioner Melanie Krause has resigned, reportedly in protest of the data-sharing agreement that bypassed her authority.
- The agreement specifically targets immigrants who have overstayed 90 days after a judge’s final removal order.
- IRS lawyers have raised concerns that the data-sharing likely violates privacy laws, while Treasury officials maintain it falls under criminal investigation exceptions.
- A federal judge has denied an emergency injunction requested by immigrant rights groups seeking to block the information sharing.
Historic Agreement Between IRS and DHS Targets Illegal Immigrants
The Department of Homeland Security (DHS) and the Internal Revenue Service (IRS) have established a formal arrangement that could dramatically change immigration enforcement tactics. Under the newly signed memorandum of understanding (MOU), the IRS will share taxpayer data with Immigration and Customs Enforcement to help locate illegal immigrants who have been ordered deported. The agreement specifically targets individuals who have remained in the country more than 90 days after receiving a final removal order from a judge, creating a new enforcement mechanism that leverages tax filing information.
The Treasury Department has defended the agreement, emphasizing it balances enforcement needs with privacy protections. “The Internal Revenue Service and the Immigration and Customs Enforcement have entered into a memorandum of understanding to establish a clear and secure process to support law enforcement’s efforts to combat illegal immigration,” a Treasury Department spokesperson stated. The agreement was signed by Treasury Secretary Scott Bessent and Homeland Security Secretary Kristi Noem, establishing formal protocols for the information exchange.
The IRS has agreed to share immigrants’ tax information with ICE to facilitate deportations. pic.twitter.com/Vn91M7RxEw
— Pop Base (@PopBase) April 8, 2025
IRS Leadership Crisis Erupts Over Data-Sharing Deal
The controversial agreement has already sparked significant internal fallout at the IRS. Acting Commissioner Melanie Krause has announced her resignation, reportedly in protest of the data-sharing arrangement that was implemented without her direct involvement. According to sources familiar with the situation, Krause was bypassed when Treasury Secretary Bessent and DHS Secretary Noem signed the agreement. Her departure comes at a challenging time for the agency, which is simultaneously implementing significant workforce reductions aimed at cutting 25% of its staff.
Internal legal experts at the IRS have raised significant concerns about the legality of the arrangement. These attorneys believe the data-sharing agreement likely violates established privacy laws designed to protect taxpayer information. The disagreement centers on whether immigration enforcement qualifies under the criminal investigation exception that allows limited sharing of tax data. Critics within the agency worry the policy could discourage tax compliance among immigrant communities who have historically filed returns using Individual Taxpayer Identification Numbers.
Legal Challenges and Privacy Safeguards
Immigrant advocacy groups moved quickly to challenge the agreement in court, filing for an emergency injunction to block the information sharing. However, US District Court Judge Dabney L. Friedrich denied their request, ruling they “have not established a likelihood of success on the merits.” The decision allows the agreement to remain in effect while legal challenges continue. Department of Justice lawyers defending the arrangement have emphasized that strict safeguards are in place to protect sensitive information.
According to court filings, “DHS and ICE must safeguard any return information disclosed by the IRS” in compliance with federal law. Despite the formalized agreement, government attorneys have indicated that as of the most recent filing date, the IRS had not yet received any actual requests for taxpayer information from DHS or ICE. Democratic senators have meanwhile requested additional details about DHS activities in IRS systems, expressing concern about potential misuse of tax information for immigration enforcement purposes.
Sources:
- IRS and DHS reach historic deal to aid in pursuit of illegal immigrants subject to deportation
- Head of IRS to resign in protest as agency inks deal to share tax data on illegal immigrants with DHS
- IRS Agrees to Share Data With Homeland Security on Illegal Immigrants
