Blocks IRS from sharing taxpayer information

Second judge blocks IRS from sharing taxpayer information with ICE

U.S. District Judge Indira Talwani cited concerns including violations of privacy laws and the possible arrest of misidentified U.S. citizens.

By Danny Nguyen and Toby Eckert

The Trump administration was dealt another setback Thursday in its effort to use taxpayer information to track down undocumented immigrants, as a second federal judge ordered the IRS to stop sharing residential addresses with Immigration and Customs Enforcement.

U.S. District Judge Indira Talwani said the information sharing potentially violated taxpayer privacy rights. She blocked the agencies from sharing the data until the court can review the case further and barred ICE from using information already provided by the IRS.

Talwani, a Boston-based appointee of President Barack Obama, raised numerous concerns about the controversial information-sharing agreement made last year by the Treasury Department and the Department of Homeland Security, the respective parent agencies of the IRS and ICE.

Beyond the possible violation of taxpayer privacy laws, Talwani cited the chilling effect the data sharing may have on tax filing by immigrants and the risk that people will be wrongfully arrested due to mistaken identity.

She pointed to the highly publicized arrest of a naturalized U.S. citizen in St. Paul, Minn., who was dragged from his house barely clothed after ICE agents mistook him for a sex offender they were looking for at the address.

The immigrant rights groups that sued to halt the information sharing “have demonstrated that a significant portion of immigrant communities not only share common last names … but also live in shared homes or in the same apartment complexes,” Talwani wrote in her opinion.

Talwani is the second federal judge to temporarily block the IRS-ICE information sharing deal. In November, U.S. District Judge Colleen Kollar-Kotelly, a Washington-based Clinton appointee, said the agreement violated a taxpayer confidentiality law, in a suit filed by an advocacy group called the Center for Taxpayer Rights.

Kollar-Kotelly also blocked Treasury Secretary Scott Bessent — who is the IRS’s acting commissioner — from disclosing taxpayer information to the Department of Homeland Security unless the official who receives the data is working on a non-tax criminal investigation.

Taxpayer data is usually concealed; the primary exception is during non-tax criminal investigations.

The federal government appealed Kollar-Kotelly’s ruling though that has not impacted her order.

Both cases stem from ICE’s effort to mine taxpayer information for immigration enforcement just weeks into the second Trump administration. The move caused shockwaves at the IRS, prompting concern from officials that the effort could violate taxpayer privacy laws.

Bessent and Homeland Security Secretary Kristi Noem subsequently entered into a formal information sharing agreement, and last August the IRS disclosed the addresses of about 47,000 taxpayers to ICE.

The immigration enforcement agency says it has not used any of the information for deportations.