The Internal Revenue Service has agreed to share identifiable data of undocumented taxpayers with immigration authorities, but immigrant rights advocates and tax law experts say it may violate privacy laws.
The agreement, found in a federal court memorandum, allows Immigration and Customs Enforcement (ICE) to send the names of people who have been ordered to leave the U.S. or are facing federal criminal investigations and cross-reference the IRS’ tax records to carry out the Trump administration’s deportation agenda.
Last month, Inclusive Action for the City, a Boyle Heights-based economic justice group, added its name to a lawsuit that sought to prevent the IRS from disclosing taxpayer information to immigration enforcement agencies.
The lawsuit, citing IRS code, says that tax records for all taxpayers must be confidential, and disclosed only in ways authorized by statute.
Rudy Espinoza, the chief executive officer of Inclusive Action, wrote in a press release Tuesday that the joint agreement would violate long-standing legal protections that are foundational to the United States tax system, infringe the civil rights and data privacy of millions of workers, and devastate the economy.
“We’re horrified by the revelation that the IRS and DHS have finalized an illegal plan to attack immigrant taxpayers who have played by the rules, worked hard, and contributed to our communities,” Espinoza wrote in the press release.
“We will continue to fight this disastrous action in the courts, and work with our partners to protect immigrant workers and small business owners in Los Angeles and across the country.”
The Immigrant Legal Resource Center, a national organization that provides legal training and policy advocacy in immigration law, considers the move a potential violation of privacy laws.
“We denounce the IRS’s decision to disclose sensitive information to ICE officials targeting immigrants for deportation, an unprecedented decision that some IRS officials and legal experts have said is in violation of law,” the group wrote in a social media post.
“Unless this is stopped by litigation, it could be expanded and interpreted in a much broader way despite claims of it being used on folks they are investigating.”
Tax law experts at the NYU Tax Law Center wrote on its website, “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.”
An amended version of the lawsuit – filed March 26 in U.S. District Court for the District of Columbia – lists Treasury Secretary Scott Bessent, acting IRS Commissioner Melanie Krause, Homeland Security Secretary Kristi Noem, U.S. Immigration and Customs Enforcement acting director Todd Lyons, as well as the IRS, the DHS, and ICE as defendants.
Inclusive Action for the City joined Illinois-based groups Centro de Trabajadores Unidos and Immigrant Solidarity DuPage, and Somos un Pueblo Unido, of New Mexico, as the plaintiffs in the suit.
Like all other workers, immigrant workers of any legal status are required to pay taxes.
Undocumented taxpayers have used Individual Taxpayer Identification Numbers (ITINs) since the 1990s to legally file taxes and start businesses, according to Inclusive Action.
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.
