IRS and ICE prepare data-sharing agreement to locate undocumented immigrants

In recent weeks, the Internal Revenue Service (IRS) and U.S. Immigration and Customs Enforcement (ICE) have made significant progress toward finalizing a data-sharing agreement aimed at identifying undocumented immigrants residing in the United States. This proposed agreement would allow ICE to submit names and addresses of individuals suspected of living in the country illegally to the IRS, which would then cross-reference these details with its confidential taxpayer databases. The purpose of this initiative is to confirm the addresses of individuals who have final removal orders and to streamline the deportation process for those individuals. The draft of the agreement has been carefully constructed, stipulating that only the Homeland Security Secretary, Kristi Noem, and the acting ICE Director, Todd Lyons, will be authorized to request address verification from the IRS. This aspect of the agreement reflects an intention to control and limit access to sensitive taxpayer information while ensuring that immigration enforcement protocols are adhered to. Requests to the IRS must be accompanied by pertinent details such as the individual’s name, address, removal order date, and other identifying information necessary for verification purposes. Under existing laws related to data verification, the IRS is allowed to release information about individuals who are the subject of criminal investigations related to immigration law violations. This aligns with a narrow exception to taxpayer confidentiality laws set forth under Section 6103 of the federal tax code. While this legal framework allows the use of taxpayer data to aid in criminal investigations, concerns have been raised by some veteran IRS officials about the implications of repurposing these rules for immigration enforcement purposes. Such concerns stem partially from the longstanding assurance the IRS has provided to undocumented workers regarding the confidentiality of their tax information, which has encouraged many to file taxes despite their undocumented status. Throughout the years, the IRS has successfully processed millions of tax returns from undocumented immigrants, emphasizing the complex intersection between immigration policy and tax compliance. Critics of the proposed agreement argue that this new measure could potentially deter undocumented individuals from filing tax returns, thereby undermining tax collection efforts from a demographic that is still required to pay federal taxes. Furthermore, the motivation behind the agreement appears to align with the Trump administration’s broader agenda to ramp up immigration enforcement initiatives, utilizing every available resource to assist ICE in deportation efforts. The evolving nature of this agreement underscores the tension between safeguarding taxpayer privacy and the enforcement of immigration laws. As the IRS continues to process returns from undocumented individuals, it remains to be seen how this agreement, once finalized, will impact the trust that undocumented immigrants have placed in the IRS as a confidential entity. The overall ramifications of this potential partnership between the agencies could have profound effects on both immigration policy and federal tax compliance moving forward.