Federal Judge Refuses to Block IRS From Sharing Tax Data to Help Deport Undocumented Immigrants

A federal judge has denied an attempt to halt the Internal Revenue Service (IRS) from sharing taxpayer data with Immigration and Customs Enforcement (ICE), clearing the way for federal immigration officials to use tax information to identify and deport people living in the U.S. without legal status.

The ruling, issued by U.S. District Judge Dabney Friedrich, allows the IRS to move forward with a controversial data-sharing agreement with the Department of Homeland Security (DHS). Under the agreement, ICE can request taxpayer data tied to individuals suspected of being in the country unlawfully, provided the agency submits names and meets certain investigative criteria.

What the Court Said

Judge Friedrich found that the agreement did not violate the Internal Revenue Code, which generally prohibits the IRS from disclosing taxpayer information without consent or legal justification. The court determined that ICE’s requests for data were narrowly tailored and allowed under exceptions for law enforcement investigations.

“The IRS is not offering open access,” the judge wrote. “This is not a bulk handover of immigrant records — each request must be tied to an individual and meet legal thresholds.”

The plaintiffs, including immigrant advocacy groups, had sought an injunction to prevent the IRS from cooperating with immigration enforcement, warning it could chill tax compliance and violate privacy rights.

Privacy and Policy Concerns

Critics argue that the policy could deter undocumented immigrants from filing taxes, something many do annually using Individual Taxpayer Identification Numbers (ITINs). According to IRS data, millions of undocumented workers contribute billions in taxes each year.

“Using tax data to target people for deportation erodes public trust,” said Maria Larios, a spokesperson for the American Immigration Council. “People pay taxes in good faith, and now that may be used against them.”

The Electronic Frontier Foundation (EFF) also raised alarms, calling the IRS-ICE agreement a dangerous precedent for federal overreach.

IRS and ICE Defend the Agreement

Officials at the IRS insist that only limited, case-specific data is being shared, and that the agency is not turning over full tax returns or bulk ITIN holder lists. ICE claims the information is critical for identifying individuals involved in fraud, identity theft, or national security concerns.

A spokesperson for DHS said:

“We are targeting high-priority immigration violators who are already under investigation.”

Legal Battle Not Over

While the judge declined to block the agreement, immigrant rights organisations say they plan to appeal the decision. They also warn of broader consequences if the ruling leads to fewer people filing taxes, weakening public revenues and economic inclusion.