The Internal Revenue Service is reportedly on the verge of finalizing a data-sharing agreement with U.S. Immigration and Customs Enforcement (ICE) that would grant immigration authorities access to sensitive taxpayer data to assist in identifying undocumented immigrants, according to sources familiar with the discussions.
The agreement, which has been under negotiation for several weeks, would allow ICE to submit the names and addresses of individuals suspected of lacking legal immigration status for comparison against IRS records. If finalized, this would represent a major shift in how tax information is used by federal agencies and would directly support the Trump administration’s ongoing immigration enforcement agenda.
Two officials with knowledge of the negotiations confirmed the talks to ABC News, though neither the IRS nor the Department of Homeland Security (DHS) has publicly commented on the matter. The plan has reportedly alarmed some career officials within the IRS, who fear it could erode public trust in the agency and violate long-standing legal protections.
Under Section 6103 of the Internal Revenue Code, the IRS is generally prohibited from disclosing taxpayer information, except in specific instances — including non-tax criminal investigations with a court order. Sharing data with ICE for immigration enforcement purposes would be unprecedented and could test the limits of those statutory exceptions.
At the center of the controversy is the population of immigrants who file federal income taxes using Individual Taxpayer Identification Numbers (ITINs). These numbers are issued by the IRS to people who are ineligible for Social Security numbers, including many undocumented immigrants. Filing taxes with an ITIN does not confer legal status but does allow individuals to comply with U.S. tax law.
A 2023 report by the Bipartisan Policy Center estimated that undocumented workers contributed approximately $25.7 billion in Social Security taxes — often using borrowed or fraudulent Social Security numbers or ITINs. Many of these individuals pay taxes annually without qualifying for benefits, making them net contributors to the system.
The IRS has historically viewed tax filing as separate from immigration enforcement, encouraging compliance regardless of status. Advocates say this approach helps bring more people into the tax system, reduces fraud, and maintains revenue flows. However, the pending agreement could jeopardize that balance.
“This proposal would weaponize the tax system for immigration enforcement,” said one immigration law expert. “It sends a dangerous message to those who have been doing the right thing by filing taxes: that their information might now be used against them.”
The proposal is part of a broader push by the Trump administration to integrate federal resources into its immigration enforcement strategy. Recent policies have included enhanced workplace raids, visa overhauls, and efforts to deputize local law enforcement. The IRS-ICE collaboration, if enacted, could represent a new tool to identify, detain, and deport undocumented immigrants using financial records.
Privacy experts and immigrant advocates warn the move could trigger a chilling effect, deterring individuals from filing taxes altogether. That, in turn, could lead to decreased compliance, increased fraud, and a loss of billions in revenue for federal and state governments.
“There’s a reason IRS data is so tightly protected,” said a former senior Treasury Department official. “Once people lose confidence in the confidentiality of the tax system, the entire structure starts to crack.”
Others warn that the implications go beyond privacy. With many undocumented immigrants living in mixed-status households, any action based on tax data could endanger U.S. citizen children and family members who are listed on returns or share addresses.
The process by which ICE would submit and cross-check names with the IRS remains unclear, as does whether the IRS would require a court order in each instance. It is also not known how the agencies would address false positives or erroneous data matches, or whether individuals would be notified if their records were used.
Despite the uncertainty, sources close to the negotiations say a draft version of the agreement is nearly complete. Legal analysts say if finalized, the deal is likely to face court challenges from civil liberties organizations and immigrant advocacy groups.
“This is legally murky territory,” said a constitutional law professor at Georgetown University. “IRS confidentiality protections are among the strongest in federal law. Any deviation from that could face serious judicial scrutiny.”
Some within the administration defend the plan as necessary to enforce immigration laws and crack down on identity fraud. Supporters argue that cross-referencing tax data could help ICE track individuals who have used fraudulent documents and hold them accountable.
Still, critics remain unconvinced. They argue that even if legally defensible, the plan would represent a seismic shift in the role of the IRS and its relationship with other federal agencies.
“This isn’t about catching criminals — it’s about creating fear,” said a representative from a national immigrant rights group. “People who have contributed to our economy paid their taxes, and raised their families in the U.S. are being treated like fugitives.”
As tax season continues and millions of Americans — including undocumented immigrants — prepare their returns, the pending agreement raises new concerns about the safety of their information. Advocates are urging Congress to intervene, calling for hearings and legislation to reinforce IRS confidentiality protections.
For now, the deal remains under review. But with growing pressure from the administration to expand deportation tools and limited legal safeguards against inter-agency data sharing, the IRS may soon find itself at the center of a politically charged battle over immigration, privacy, and public trust.
