IRS improperly disclosed taxpayer data to DHS officials, court filing shows

The Internal Revenue Service disclosed confidential taxpayer information of thousands of people to the Department of Homeland Security as part of a controversial agreement to share immigration data to help the agencies identify those living in the country illegally, according to a new court filing.

The Treasury Department, the IRS and the Department of Homeland Security finalized an agreement last spring allowing taxpayer data to be shared with immigration authorities to help them find illegal immigrants.

The agreement, which led to the resignation of top IRS officials, gave Immigration and Customs Enforcement the authority to send the names and addresses of illegal immigrants to the IRS for cross-verification of tax records.

In a memo filed Wednesday, IRS Chief Risk and Control Officer Dottie Romo said the IRS was able to verify about 47,000 of the 1.28 million names that ICE requested and were later disclosed to immigration enforcement.

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The IRS provided additional address information to ICE for less than 5% of these names; This potentially violates privacy rules created to protect taxpayer data.

The tax collection agency said it recently discovered the error and was working with other federal agencies to resolve the problem.

Romo said Treasury notified DHS of the error last month and asked for assistance in “immediately taking steps to correct the matter, consistent with federal law,” which included “appropriate destruction of data provided to ICE by the IRS based on incomplete or insufficient address information.”

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The Treasury Department, the IRS and the Department of Homeland Security reached an agreement last spring allowing taxpayer data to be shared with immigration authorities. (Victor J. Blue/Bloomberg via Getty Images)

Last year’s settlement between the IRS and DHS sparked a lawsuit against the Trump administration and overturned a longstanding IRS policy that assured immigrants that their data was safe and encouraged them to pay taxes even if they were not legally present in the United States.

Shortly after the agreement was signed, a lawsuit was filed against Treasury Secretary Scott Bessent and Homeland Security Secretary Kristi Noem on behalf of various immigrant rights groups.

Last week, a federal judge ordered the IRS to stop disclosing residential addresses to ICE, marking the second decision blocking the IRS-DHS deal.

In November, a different federal judge blocked the IRS from sharing information with DHS, saying the IRS illegally disseminated some immigrants’ tax data over the summer, violating taxpayer privacy law.

Shortly after the agreement was signed, a lawsuit was filed against Treasury Secretary Scott Bessent and Homeland Security Secretary Kristi Noem on behalf of various immigrant rights groups. (Joe Raedle/Getty Images)

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Advocacy groups have raised concerns that the potentially illegal release of taxpayer records could be used to maliciously target U.S. citizens and invade their privacy.

“When taxpayer data is opened up to immigration enforcement, mistakes are inevitable and the consequences fall on innocent people,” Tom Bowman, policy counsel at the Center for Democracy and Technology, told The Associated Press. “The disclosure of thousands of confidential records unfortunately shows exactly why stringent legal firewalls exist and why they have until now been viewed as a significant guardrail.”

The Associated Press contributed to this report.