Federal appeals court blocks IRS from sharing taxpayer data with ICE
A federal appeals court unanimously blocked a Trump administration program allowing the IRS to share taxpayer address data with ICE. The D.C. Circuit ruled the policy likely violated post-Watergate tax confidentiality laws under Section 6103. ICE had requested addresses for 1.28 million people, and over 47,000 records were shared before the injunction. The ruling marks a major setback for the administration's broader strategy of linking federal databases to bolster immigration enforcement.
IRS-ICE data-sharing agreement
▪The U.S. Court of Appeals for the District of Columbia Circuit upheld a lower-court injunction blocking an Internal Revenue Service policy that allowed the sharing of taxpayer address data with Immigration and Customs Enforcement
▪Under a July 2025 agreement, the Internal Revenue Service began processing Immigration and Customs Enforcement requests for the last known addresses of up to 1.28 million people suspected of unlawfully residing in the United States
▪The Internal Revenue Service had already shared 47,289 taxpayer records with Immigration and Customs Enforcement before a lower-court judge blocked the data-sharing policy in November
▪The Internal Revenue Service developed a "Data-Exchange Procedure" that allowed Immigration and Customs Enforcement to obtain taxpayer information even when address fields contained non-address entries like "Unknown Address" or "NA NA."
Federal tax confidentiality law violations
▪Immigration and Customs Enforcement identified the exact same individual as the point of contact for all 1.28 million taxpayer data requests submitted to the Internal Revenue Service in the summer of 2025
▪The Internal Revenue Service failed to require Immigration and Customs Enforcement to provide a specific reason why the requested return information was relevant to an active investigation, as required by federal law
▪The D.C. Circuit Court of Appeals found that the Internal Revenue Service's data-sharing procedure likely violated Section 6103 of the Internal Revenue Code by disclosing taxpayer information without statutory prerequisites
▪Government attorneys acknowledged during oral arguments before the D.C. Circuit Court of Appeals that some taxpayer disclosures to Immigration and Customs Enforcement occurred in violation of federal statute
Appeals court injunction ruling
▪The Department of Homeland Security expressed strong disagreement with the appeals court ruling and stated it would continue using other lawful tools to locate and remove undocumented immigrants
▪A three-judge panel of the U.S. Court of Appeals for the D.C. Circuit, led by Judge Cornelia Pillard, unanimously ruled on September 8, 2026, to uphold the preliminary injunction against the IRS-ICE data-sharing program
▪The D.C. Circuit Court of Appeals rejected the Trump administration's argument that the Internal Revenue Service's data-sharing procedure was an unreviewable internal operational process, holding instead that it constituted final agency action
Post-Watergate taxpayer privacy protections
▪The Center for Taxpayer Rights stated that the government must notify the approximately 43,000 taxpayers whose return information was unlawfully shared with Immigration and Customs Enforcement so they may seek damages
▪Following the Watergate scandal, Congress enacted strict privacy laws under Section 6103 of the Internal Revenue Code to prevent executive branch abuses of sensitive taxpayer information
▪The D.C. Circuit Court of Appeals recently denied the Trump administration's request to stay a lower-court ruling that blocked an expanded version of the Systematic Alien Verification for Entitlements (SAVE) citizenship-verification system
▪The Trump administration has actively sought to link multiple federal databases, including tax, immigration, and Social Security records, to assist with immigration enforcement and voter-roll maintenance
▪The Trump administration petitioned the Supreme Court on September 8, 2026, to take up the ongoing litigation surrounding the modified Systematic Alien Verification for Entitlements (SAVE) system
Story comments
Loading comments…