Tax Day is here, but fear of deportation may deter some undocumented immigrants from filing returns.
Anxiety spread last week after the Internal Revenue Service (IRS) agreed to share certain taxpayer information with U.S. Immigration and Customs Enforcement (ICE). The deal allows ICE access to identifiable data of undocumented immigrants who either face final orders of removal or who are under a criminal investigation.
Tax law experts say the agreement could violate privacy protections. On its website last week, the NYU Tax Law Center warned “the agreement threatens to violate the rights that many more Americans have under longstanding laws that protect their tax information from wrongful disclosure or dissemination.”
Although April 15 is the traditional deadline for filing tax returns, all taxpayers in L.A. County automatically qualify for a six-month extension this year due to the impacts of the wildfires that severely impacted the region in January.
Cara Jobson, a California-based immigration lawyer, said the new agreement “puts people between a rock and a hard place” but noted that the extra time offered to L.A. County residents may be crucial for some undocumented immigrants who are weighing the risks of filing.
We’re answering some of the most pressing questions about the tax data sharing deal and asked Jobson to weigh in.
How do undocumented people pay taxes without a Social Security number?
Like all other workers, undocumented immigrants are required to pay taxes.
Taxpayers without a Social Security number use an Individual Taxpayer Identification Number (ITIN) issued by the IRS to legally file taxes and start businesses. ITINs are the numbers ICE is trying to secure, according to Jobson.
In 2022, undocumented immigrants paid more than $96 billion in federal, state and local taxes, according to the Institute on Taxation and Economic Policy. In California alone, undocumented immigrants generated $8.5 billion in tax revenue.
Who’s behind the tax data sharing agreement?
The deal was outlined in a memorandum of understanding (MOU) between the Treasury Department, the IRS, and the Department of Homeland Security, which oversees ICE.
Jobson called the move “troubling,” considering what was normally protected under IRS privacy laws was now being shared with ICE. The deal, she said, was meant to further the Trump Administration’s mass deportation agenda.
Boyle Heights Beat reached out to both the IRS and DHS for comment but did not hear back in time for publication.
Who is affected by the agreement?
Under the new agreement, ICE will be able to request names and addresses of undocumented immigrants who either face final orders of removal or who are under a criminal investigation. Because the MOU is partially redacted, it is currently unclear how many people are targeted or when the data will be shared across agencies.
Jobson notes that not every immigrant without documentation has orders for removal against them but expressed concern that the precedent of who immigration enforcement is targeting may expand to all undocumented persons.
“There’s a lot of people who have no order of removal, no criminal record and are just trying to do the right thing [by paying taxes],” Jobson said.
What are undocumented taxpayers risking when filing taxes this year?
Jobson believes filing taxes this tax season may put undocumented immigrants at risk of being located by ICE and removed from the U.S. in the future.
“These are people who are hard-working and contributing to the community and trying to do the right thing by getting an ITIN number and filing their taxes, and now that is going to be what DHS presumably uses, through this agreement, to hunt people down,” Jobson explained.
What are the repercussions of not filing taxes?
Jobson notes that a failure to pay taxes may negatively impact the “good moral character” standing of undocumented individuals seeking immigration relief or even citizenship down the line. She suggested that if people are worried, and they can afford to wait, then assessing the risk while on an extension may be an option.
“I think if people in L.A. have a lawful extension till October, then perhaps it makes sense to wait a bit to see how far they’re going to take this in terms of hunting people down and then make a decision with all the information. But it puts people between a rock and a hard place,” Jobson said.
According to the IRS, if you owe taxes and miss the filing deadline, the IRS may charge up to a 25% penalty, add interest, and even place liens or pursue criminal charges in severe cases. However, if you’re owed a refund and don’t file, there’s no penalty—but you must claim it within three years to receive it.
Is there any legal action challenging the agreement between the IRS and ICE?
Yes, immigration advocacy groups, including Inclusive Action for the City, a Boyle Heights-based economic justice group, have sued to prevent the sharing of taxpayer data between the two agencies. The lawsuit argues that the collaboration defies years of precedent protecting the privacy of all taxpayers, citing IRS code.
On April 9, dozens of senators, including Alex Padilla of California, issued a letter to the inspector general’s office, requesting a federal investigation into the IRS and ICE deal.
“Voluntary tax compliance depends on taxpayers having faith that their confidential information will not be used for anything other than tax administration,” the letter states.
“Otherwise, those who value their privacy are less likely to file and pay what they owe.”
The letter projects that taxpayer behavior may be impacted, reducing revenue by $25 billion in 2026 per a Yale Budget Lab calculation.
