IRS Improperly Shares Immigrants’ Data with ICE: Explained

The IRS’ improper disclosure of thousands of immigrants’ personal information to the Department of Homeland Security fulfilled early warnings that the data-sharing deal between the agencies would put taxpayer data at risk.

The IRS and DHS in April 2025 agreed to share data of immigrants to help with criminal investigations, subject to privacy law limitations. But the agency in a Wednesday court filing said it inappropriately overshared some immigrants’ address information with DHS’ Immigration and Customs Enforcement.

Multiple IRS leaders quit after last year’s agreement was signed, and former government officials and tax attorneys also raised alarms that it skirted the intent of strict IRS taxpayer privacy rules. Upholding that privacy is a key mission at the IRS and valued by both Democrats and Republicans. Government officials can face civil and criminal penalties for sharing confidential tax information without authorization.

In the largest data breach in IRS history, former IRS contractor Charles Littlejohn is serving a five-year prison sentence for leaking tax information of thousands of wealthy Americans to news outlets. President Donald Trump, who was part of the leak, is suing the agency for $10 billion.

Here’s the breakdown on the data-sharing issue.

1. What are the terms of the IRS-DHS agreement?

ICE requested information from the IRS for individuals under non-tax criminal investigations, which is one of the exceptions to disclosure restrictions under Section 6103 of the Internal Revenue Code.

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

After ICE requested 1.28 million addresses, the IRS was only able to verify 47,289 individuals. And for less than 5% of those verified, the IRS mistakenly provided ICE with additional address information where ICE had incomplete information.

2. What’s next for the people whose information was shared?

IRS Chief Risk and Control Officer Dottie Romo did not say in the court filing whether the agency plans to notify individuals affected by the mistake.

In the historic Littlejohn leak, the IRS sent letters alerting the more than 400,000 taxpayers affected. The letters went out several years after Littejohn stole the tax information and had little details on what information specifically was taken.

Taxpayers have the option to sue the IRS if their data is breached. In the Littlejohn leak, most taxpayers opted not to sue because the damages they could win are small, and it’s difficult to show harm in a privacy breach.

Michael Bloomberg was among those included in the Littlejohn leaks. Bloomberg Law is operated by entities controlled by Bloomberg.

3. Is the IRS still sharing data with DHS?

Court rulings have put a temporary pause on data sharing between the agencies for immigration enforcement.

Several immigration and taxpayer rights groups sued the IRS shortly after the April 2025 inter-agency agreement was finalized. Two federal judges temporarily blocked the agreement, saying the IRS acted unlawfully when it turned over addresses of immigrants suspected of being in the country illegally. The government appealed those rulings.

Romo in the recent court filing said DHS said it wouldn’t “inspect, view, use, copy, distribute, rely on, or otherwise act on” any return information shared under the agreement until the injunction is resolved.

4. What impact does this deal have on immigrants filing their taxes?

The IRS mistake piles onto the chilling effect on immigrants filing their taxes this year.

Immigrants—no matter their status—are required to pay taxes in the US and can receive limited tax benefits. Immigrants without documentation can file their federal tax returns using an individual taxpayer identification number from the IRS instead of a Social Security number.

Immigrant families are increasingly considering not filing their taxes this year because of deportation concerns and new Treasury tax benefit restrictions, tax professionals said.

The Institute on Taxation and Economic Policy estimated that in 2022, undocumented immigrants paid nearly $100 billion in federal, state, and local taxes.

Read More:

IRS Mistakenly Shares Data on Thousands of Immigrants With ICE
IRS’ Core Mission in Doubt as Trump Policies Push Leaders Out
Presidential Influence Complicates IRS Defense Against Trump
IRS Can Only Give Tax Data to ICE in Deportation, Criminal Cases
IRS Leak Leaves Rich Taxpayers Frustrated WithFew Legal Options
IRS Blocked From Sharing Tax Data for Immigration Enforcement
DHS Access to IRS Taxpayer Info Blocked in Federal Court (1)
Trump’s Immigrant Tax Credit Rule Could Weigh on Filing Decision