Immigrants Are a Hidden Cost of the IRS Data Sharing Agreement

The data-sharing agreement between the IRS and Department of Homeland Security is raising serious concerns—and not just for immigrants, but for the lawyers and tax professionals who serve them.

Under the deal, US Immigration and Customs Enforcement can submit names of individuals with final removal orders to the IRS, which would then cross-reference its confidential databases to confirm taxpayer information, including addresses and other identifying data.

For decades, federal law has protected taxpayer data from being used for anything other than tax administration. This confidentiality has been key to encouraging voluntary compliance, especially among undocumented immigrants who pay taxes using Individual Taxpayer Identification Numbers, or ITINs. That trust is now on the line.

For attorneys, accountants, and tax professionals, the message from immigrant clients is already clear: They are afraid. And when fear takes hold, people stop showing up. They stop filing returns and stop asking for help. That puts professionals in a difficult spot—trying to reassure clients while also keeping them compliant.

Many undocumented immigrants file taxes to demonstrate good moral character or to prepare for possible future pathways to legal status. They also file to access critical tax credits and benefit programs.

If fear pushes them away from these systems, the ripple effect will be devastating—not just for families, but for the cities and communities that depend on their participation. This could lead to labor disruptions, incomplete filings, or compliance gaps—especially in industries that rely on immigrant workers or serve mixed-status families.

Millions in benefits go unclaimed every year—not because people don’t qualify, but because they don’t trust the system. Families may question whether it’s even safe to apply for help. That fear has real consequences—but tax professionals and attorneys can push back by making sure clients know what they’re still entitled to.

That fear won’t stay confined to IRS forms—it may cause vulnerable individuals to suffer in silence by avoiding potential legal aid, health programs, and even basic services.

This should be a call to action for professionals in the legal and financial space to educate clients on what rights and protections they do have. There are three main ways you can help.

Get ahead of the confusion. Talk to your clients proactively, especially those who use ITINs or live in mixed-status households. Explain what this agreement does and doesn’t do—and that, for now, their rights and obligations remain the same. Many are hearing rumors, misinformation, and worst-case scenarios that could discourage them from filing taxes.

As a trusted adviser, you have the opportunity to set the record straight. Sometimes, clear and confident reassurance is all someone needs to feel comfortable moving forward.

Reinforce trust. Whether you’re preparing a return, helping a small business navigate compliance, or advising on immigration status, emphasize confidentiality. Make sure your team knows how to speak clearly and confidently about data security and privacy protections. These everyday conversations can make a meaningful difference in maintaining the trust this policy threatens to erode.

Connect your clients with reputable resources. Many nonprofits and legal aid organizations are preparing to respond with targeted support, informational sessions, and legal representation if needed. Partnering with these groups—or simply pointing clients in the right direction—is a powerful way to show that your support goes beyond numbers and paperwork. It’s rooted in trust, care, and community.

This isn’t just another policy change. It’s a challenge to how people interact with the systems that are supposed to serve them. And in moments like this, lawyers and tax professionals play a crucial role—not just as technical experts, but as advocates for clarity, fairness, and dignity.

This article does not necessarily reflect the opinion of Bloomberg Industry Group, Inc., the publisher of Bloomberg Law and Bloomberg Tax, or its owners.

Author Information

Jean-Marc Appolon is a New York City based attorney specializing in AI, cybersecurity, and data privacy.

Write for Us: Author Guidelines