The U.S. immigration landscape is once again facing a troubling development as the Trump administration reportedly moves toward a data-sharing agreement between the Internal Revenue Service (IRS) and Immigration and Customs Enforcement (ICE). The emerging plan—spearheaded under the guise of enhancing enforcement efficiency—would allow ICE to access taxpayer data to confirm names and addresses of undocumented immigrants, including those with final removal orders.
At Saluja Law, we are deeply concerned by this unprecedented shift in policy. For decades, taxpayer confidentiality has stood as a cornerstone of the U.S. tax system—a principle rooted in lessons learned from past abuses, such as those under the Nixon administration. The IRS has historically insulated itself from being used as a law enforcement tool to protect both the integrity of the tax system and the rights of taxpayers, regardless of immigration status. This pending agreement would erode that separation.
A Dangerous Precedent
According to numerous reports, the Trump administration's plan may boost short-term arrest numbers for political gain. However, the long-term consequences could be severe. Experts warn that this data-sharing effort would cause a chilling effect in immigrant communities, pushing undocumented taxpayers underground and leading to a steep decline in compliance.
Undocumented immigrants contribute significantly to the U.S. economy, paying nearly $100 billion in taxes annually. Many do so using Individual Taxpayer Identification Numbers (ITINs), a system specifically created to encourage tax compliance by those without Social Security numbers. By turning the IRS into an arm of immigration enforcement, the government risks sabotaging a rare policy success: undocumented immigrants willingly participating in a civic responsibility.
Eroding Institutional Norms
Even within the IRS, there has been visible resistance. The agency is now on its third leader this year, with senior officials reportedly leaving amid internal friction over the policy. Longtime agency professionals—such as former national taxpayer advocate Nina Olson—have called the proposed collaboration “unprecedented.” Others have expressed concern that the move could violate taxpayer privacy laws and prompt a loss of institutional trust.
The limited scope of the agreement—allegedly allowing address confirmation only upon specific request by top Homeland Security officials—does little to quell the anxiety among advocates, immigrants, and tax professionals. Any breach of the firewall that has long separated tax collection from immigration enforcement marks a dangerous shift.
Undermining Legal Immigration Pathways
Importantly, filing taxes is one of the ways immigrants establish "good moral character" for future immigration benefits, including naturalization. If tax records can now be weaponized against them, many will understandably choose not to file. This undermines the government's own immigration pathways and erodes the very rule of law the administration claims to uphold.
Legal Challenges Ahead
The blueprint for this data-sharing agreement is almost certain to face legal challenges. A recent lawsuit on this issue was dismissed due to lack of imminent harm—but that could soon change. As soon as an official memorandum is signed, immigrant rights groups are expected to challenge the agreement in court. At stake are both individual rights and broader institutional norms that underpin tax fairness and confidentiality.
Conclusion
Policymakers should reconsider this reckless and counterproductive initiative. Immigration enforcement should not come at the cost of undermining the tax system or violating long-held norms of privacy and trust. Undocumented immigrants who work, pay taxes, and contribute to their communities are not threats—they are neighbors, colleagues, and part of the fabric of this country.
We stand ready to advocate for those impacted by these changes and encourage immigrants to consult legal counsel before making decisions related to tax filings or immigration compliance. As the situation evolves, we will continue to provide updates and support to those navigating these turbulent times.