IRS Defends ICE Data Sharing on Appeal, Despite Disclosure Error

The IRS urged a federal appeals court Tuesday to overturn an injunction barring it from sharing taxpayer data with immigration authorities, even as the agency recently admitted mistakenly sharing some immigrants’ personal information.

The lower court “abused its discretion” in November 2025 by halting the agency’s data-sharing agreement with Immigration and Customs Enforcement, the IRS said. It asked the US Court of Appeals for the DC Circuit to vacate the injunction preventing the IRS from sharing data on millions of American taxpayers with Department of Homeland Security because the Center for Taxpayer Rights failed to prove the agreement directly affected or obstructed its core business activities.

The IRS also contended that the Center and other plaintiffs failed to prove they have standing to challenge the agreement or that it qualifies as “final agency action” reviewable under the Administrative Procedure Act.

“Here, plaintiffs cannot establish a cognizable injury for Article III standing purposes, let alone the kind of irreparable harm necessary to support a preliminary injunction,” the IRS said.

The Center—along with the Main Street Alliance, the National Federation of Federal Employees, and Communications Workers of America—sued in February 2025, arguing the information sharing violated the Tax Reform Act, the Privacy Act, and the APA.

The government’s appellant brief follows a declaration filed in the district court in which an IRS official said the agency mistakenly gave DHS personal data on thousands of immigrants during the now-suspended inter-agency data-sharing agreement.

Under the agreement between DHS and the IRS, the IRS was effectively only able to match an individual’s full address with its records if the address was first provided by ICE.

IRS Chief Risk and Control Officer Dottie Romo said the agency was only able to verify 47,289 individuals of the 1.28 million ICE requested. For less than 5% of those verified, the IRS mistakenly provided ICE with additional address information where ICE had incomplete information, according to the Feb. 11 filing.

In response, the Center asked the appeals court in a Feb. 13 motion to pause the case, arguing the newly disclosed facts about the data-sharing errors support the district court’s ruling.

Democracy Forward Foundation represents the Center for Taxpayer Rights.

The case is Center for Taxpayer Rights v. IRS, D.C. Cir., No. 26-05006, appellant brief filed 2/17/26.