A U.S. District Judge has temporarily halted the IRS from sharing taxpayer information with U.S. Immigration and Customs Enforcement (ICE), ruling the policy unlawful. The decision follows concerns that confidential taxpayer addresses were disclosed without legal authority, affecting nearly 47,000 individuals. The order pauses the practice while courts review the case and clarifies limits on government access to sensitive financial data. The ruling signals increased judicial scrutiny over immigration-related data sharing.
Judge Labels Policy Unlawful
U.S. District Judge Colleen Kollar-Kotelly wrote in a 94-page ruling that, “The Plaintiffs have shown a substantial likelihood that the IRS’s adoption of the Address-Sharing Policy and the IRS’s subsequent sharing of taxpayer information with ICE were unlawful under the Administrative Procedure Act.” She added, “Furthermore, Plaintiffs have shown that the IRS’s disclosure of confidential taxpayer address information to ICE was contrary to law because it violated several provisions of the Internal Revenue Code.”
Scope of Information Disclosed
The court order noted that in early August, the IRS shared information concerning nearly 47,000 taxpayers. While the full details of the disclosures have not been publicly outlined, the case highlights the potential consequences of government agencies accessing sensitive taxpayer data without proper authorization.
Policy Temporarily Halted
The judge’s order paused the policy establishing IRS data sharing pending further judicial review. The ruling also preliminarily enjoined the IRS, the Treasury Department, and Treasury Secretary Scott Bessent from sharing tax return information with the Department of Homeland Security, though the order allows exceptions if approved by the court.
Leadership Changes at IRS
The agency has seen significant turnover this year, with six different individuals holding the lead position. Scott Bessent became the latest acting commissioner after the removal of Billy Long in August, raising questions about continuity and oversight during a period of contentious data-sharing policies.
Other Agencies Still Sharing
While the IRS is now restricted, other federal agencies are continuing to provide information to ICE. The Department of Health and Human Services stated in a memo Friday that it intends to share data to support efforts to identify undocumented immigrants, underscoring ongoing inter-agency collaboration on immigration enforcement.
No Immediate IRS Comment
The Treasury Department and the IRS did not respond to requests for comment following the ruling. The lack of immediate statements leaves uncertainties about how the agencies will implement the order or adjust internal policies moving forward.
Legal Implications Rising
The ruling sets a precedent regarding the limits of federal agencies sharing sensitive taxpayer information for immigration enforcement purposes. Legal experts suggest this decision could influence future disputes over privacy, administrative law, and government access to personal financial data.