A federal judge has ruled that the Internal Revenue Service violated federal law by disclosing confidential taxpayer information to Immigration and Customs Enforcement approximately 42,695 times.
The decision, issued Thursday by US District Judge Colleen Kollar-Kotelly, centres on the disclosure of ‘last known taxpayer addresses’ to ICE as part of a controversial data-sharing agreement between the IRS and the Department of Homeland Security.
The federal government is appealing the case. However, the ruling adds significant weight to ongoing legal challenges over how taxpayer data may be shared for immigration enforcement purposes.
Court Finds Violations of IRS Code 6103
In her decision, Judge Kollar-Kotelly determined that the IRS violated Section 6103 of the Internal Revenue Code—one of the strictest confidentiality statutes in federal law—by improperly releasing taxpayer address information.
Her findings relied on a declaration filed earlier this month by Dottie Romo, the IRS’s chief risk and control officer. The declaration revealed that the IRS had provided DHS with information on approximately 47,000 individuals out of the 1.28 million people ICE had requested for verification. In most of those cases, the IRS shared additional address details that exceeded what privacy rules permit.
‘The IRS not only failed to ensure that ICE’s request for confidential taxpayer address information met the statutory requirements,’ the judge wrote, ‘but this failure led the IRS to disclose confidential taxpayer addresses to ICE in situations where ICE’s request for that information was patently deficient.’
Judge Kollar-Kotelly described the Romo declaration as ‘a significant development in this case.’
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The Data-Sharing Agreement
The disclosures stem from an agreement signed last April between Treasury Secretary Scott Bessent and Homeland Security Secretary Kristi Noem. The agreement allows ICE to submit names and addresses of immigrants believed to be in the United States illegally to the IRS for cross-verification against tax records.
The arrangement drew criticism from taxpayer advocates and immigrant rights groups, who argued that using tax information in immigration enforcement could undermine longstanding confidentiality protections.
The controversy also led to the resignation of the IRS’s then-acting commissioner shortly after the agreement was signed.
Legal Challenges Continue
Several lawsuits challenging the IRS-DHS agreement remain active.
Earlier this week, a three-judge panel of the US Court of Appeals for the D.C. The circuit declined to issue a preliminary injunction requested by Centro de Trabajadores Unidos and other nonprofit organisations seeking to halt implementation of the agreement.
In rejecting the request, Judge Harry T. Edwards wrote that the nonprofit groups were ‘unlikely to succeed on the merits of their claim,’ noting that the information shared may not fall under the strictest interpretation of IRS privacy statutes.
However, two separate court orders remain in place. Those preliminary injunctions block large-scale transfers of taxpayer information and prohibit ICE from acting on IRS data already in its possession.
Agency Response
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Representatives from the IRS and the Treasury Department did not respond to requests for comment following the ruling.
Nina Olson, founder of the Center for Taxpayer Rights, which has sued the government over the disclosures, said the ruling confirms concerns raised by her organisation.
‘This confirms what we’ve been saying all along: that the IRS has an unlawful policy that violates the Internal Revenue Code’s protections by releasing these addresses in a way that violates the law’s requirements,’ Olson said.
Broader Implications
The case highlights ongoing tensions between tax confidentiality laws and immigration enforcement policies. Section 6103 has long been regarded as a cornerstone of taxpayer privacy, designed to ensure individuals can file tax returns without fear that their personal information will be used for unrelated enforcement actions.
As the government’s appeal proceeds, the ruling underscores the continuing legal scrutiny surrounding the IRS-DHS agreement and its future.
For now, the court’s finding that the IRS violated federal law approximately 42,695 times marks a significant development in the broader debate over taxpayer privacy and immigration enforcement in the United States.
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