By Chris Tobias | Editorial credit: Tada Images / shutterstock.com
The recent agreement between the Internal Revenue Service (IRS) and the Department of Homeland Security (DHS) to share tax information of certain undocumented immigrants represents a significant shift in the handling of confidential taxpayer data. This memorandum of understanding permits Immigration and Customs Enforcement (ICE) officers to request information about immigrants who have final orders of removal or are under criminal investigation, including for failing to leave the country after 90 days.
Background and Details of the Agreement
Historically, the IRS has maintained strict confidentiality regarding taxpayer information, including that of undocumented immigrants who contribute billions in taxes annually using Individual Taxpayer Identification Numbers (ITINs). The new agreement, signed by Treasury Secretary Scott Bessent and Homeland Security Secretary Kristi Noem, aims to establish a “clear and secure process to support law enforcement’s efforts to combat illegal immigration.”
However, many parts of the 15-page document are redacted, making it challenging to fully understand the extent of the information-sharing. The framework includes several pages of rules and requirements for how ICE officers must handle the information they receive.
Implications and Concerns
This development has raised significant concerns among immigrant advocates and privacy experts. Murad Awawdeh, CEO of the New York Immigration Coalition, stated that the IRS’s decision “threatens the safety of thousands of workers while forcing them further into the shadows, and discourages tax compliance.”
Critics argue that this move could deter undocumented immigrants from filing taxes, fearing that their information might be used against them, potentially leading to decreased tax compliance and a reduction in tax revenues. In 2022, undocumented immigrants contributed approximately $96.7 billion in federal, state, and local taxes.
Resignation of Acting IRS Commissioner
The agreement has also led to internal dissent within the IRS. Acting IRS Commissioner Melanie Krause announced her resignation in apparent protest of the deal. Her departure marks the third leadership change at the IRS this year, highlighting the turmoil within the agency.
Legal and Ethical Considerations
Legal experts have raised questions about the legality of the agreement, suggesting it may violate privacy laws designed to protect taxpayer information. The IRS has historically assured taxpayers that their information remains confidential, and this agreement appears to contradict those assurances.
Furthermore, this move aligns with the Trump administration’s broader immigration enforcement agenda, which has included efforts to undermine sanctuary laws and increase deportations.
Conclusion
The IRS-DHS information-sharing agreement represents a pivotal change in the use of taxpayer data, intertwining tax administration with immigration enforcement. While the administration argues that this measure is necessary for national security and law enforcement, it raises profound concerns about taxpayer privacy, potential declines in tax compliance, and the ethical implications of using confidential tax information for immigration enforcement purposes. The resignation of Acting Commissioner Krause underscores the contentious nature of this policy shift, suggesting that debates over the balance between enforcement and privacy are far from settled.
