Court Blocks IRS Data Sharing with ICE

On September 8, a three-judge panel of the U.S. Court of Appeals for the District of Columbia Circuit upheld a district-court injunction that bars the Internal Revenue Service from providing taxpayer address information to Immigration and Customs Enforcement (ICE). The panel found the IRS-ICE “Data-Exchange Procedure” to “indisputably contravene” the requirements of Section 6103 of the Internal Revenue Code, which limits disclosure of tax-return information.

New Tang Dynasty

The policy originated from a memorandum of understanding signed in April 2025 between the IRS and ICE. Under the agreement, ICE requested the last known addresses of individuals it identified as “suspected of unlawfully residing” in the United States. The Trump administration promoted the program as a tool for immigration enforcement, arguing that it supported law-enforcement investigations. Post-Watergate privacy statutes, enacted after abuses of taxpayer data in the 1970s, impose strict conditions on any inter-agency sharing of tax information.

The Straits Times

• ICE’s request list covered roughly 1.28 million taxpayers.

New Tang Dynasty

• The IRS processed the requests and transmitted 47,289 records to ICE before the district court stayed the practice (as reported by the appeals court).

FedScoop

• Other filings note “more than 47,000” matches and that “nearly 1.3 million” taxpayers were targeted, reflecting slight variations in the reported totals.

The Straits Times

Democracy Forward president and CEO Skye Perryman called the ruling a reinforcement of post-Watergate privacy laws. Government attorneys argued that the plaintiffs lacked standing and that the IRS’s internal process should not be subject to judicial review, but the court rejected those positions.

FedScoop

Plaintiffs—including the Center for Taxpayer Rights, the Main Street Alliance, the Communications Workers of America, and the National Federation of Federal Employees—contended that the automated procedure bypassed the individual review required by law, exposing immigrant taxpayers to “unlawful disclosure” and discouraging participation in tax-assistance programs. They argued that ICE’s requests often omitted required name and address details, violating statutory safeguards.

Newsweek

• “The Data-Exchange Procedure indisputably contravenes the requirements of section 6103,” — Judge Cornelia Pillard, US circuit judge

Newsweek

• “The privacy laws enacted in the post-Watergate era exist to prevent abuses of power just like this,” — Skye Perryman, president and CEO of Democracy Forward

FedScoop

Sources differ on the exact number of records shared: the appeals court opinion cites 47,289 disclosures, while other reports round the figure to “more than 47,000” or “over 47,000” matches. Additionally, the total number of individuals targeted is described as “roughly 1.28 million,” “nearly 1.3 million,” and “more than 1 million,” indicating minor inconsistencies in the reported scope.

FedScoop

Plaintiffs indicated they will seek notification of the affected taxpayers so they may pursue damages. The IRS may consider appealing the decision, though no formal notice of appeal has been reported.

FedScoop