What We Now Know About the IRS-ICE Tax Data Deal

With only a few days left before Tuesday’s filing deadline, the Internal Revenue Service made a major change in how President Donald Trump’s administration can use the tax records of certain undocumented immigrants.

On April 7, Secretary of the Treasury Scott Bessent signed a memorandum of understanding with the Department of Homeland Security, on behalf of the IRS, allowing for the agency to share personal tax information of undocumented immigrants who are “under criminal investigation.” This is the first time the IRS has entered into this kind of agreement as part of an immigration enforcement mandate.

• Jump straight to: What are lawyers and advocates advising people who haven’t filed their taxes yet to do?

The 15-page document — still partially redacted — lays out the details of this agreement between the IRS and U.S. Immigration and Customs Enforcement, the primary federal agency tasked with carrying out deportations. According to the document, ICE can now request the information of noncitizens that the immigration agency is investigating for specific federal crimes, including staying in the country after receiving a final order of removal.

For months, different media outlets had reported that Trump administration officials were in talks with the IRS to access the tax data of undocumented immigrants, but it was unclear what exactly was on the table. Now that the agreement is widely available, immigrant advocacy groups are criticizing the IRS for accepting these terms.

“This represents a broken promise to immigrants across the country who have relied on the representation of the IRS that their information will not be shared with immigration enforcement,” said Josh Rosenthal, who leads the workers’ rights program at the Asian Law Caucus in San Francisco.

KQED previously reported that Bay Area community tax clinics have consistently heard concerns this year from families worried that the IRS would share their tax information with other government agencies.

“Attempting to transform the tax system into an immigration enforcement tool is not just illegal and immoral, it’s also destructive economic policy,” said Kelly Batson, chief community impact officer for United Way Bay Area, which works with free tax sites all over the region.

“Attacks on immigrant communities push vulnerable families further into the shadows and deeper into poverty,” she said, adding that she is “beyond dismayed.”

KQED spoke to legal experts familiar with the IRS document to better understand who it impacts — and what this could mean for the tax data privacy of undocumented immigrants and the overall U.S. population.

What is the objective of the IRS-ICE agreement?

The agreement states that the Department of Homeland Security “has identified numerous aliens illegally present in the United States” who have received a final order of removal.” These individuals, DHS claims, are “under criminal investigation” for violating federal law.

The law in question is a section in the U.S. Code that establishes that noncitizens could be in violation of the law if they do not leave the U.S. within 90 days of receiving a final order of removal. The IRS-ICE memorandum of understanding also agrees that the federal government can request data if a person is in violation of “another specifically designated Federal criminal statute.”

Does the agreement include every undocumented immigrant in the country? At the moment, according to Rosenthal, the document only allows the IRS and ICE to share data “in the limited circumstance of investigating a federal crime.”

“It is not a crime in itself to be undocumented,” Rosenthal said. “That’s a civil violation, and that is not a valid reason for the IRS to share information.” Instead, he explained that the federal crime the Trump administration identified is “staying in the country past a final order of removal.”

According to data from the Transactional Records Access Clearinghouse, a research organization that makes government data available, federal immigration judges issued 162,514 removal orders in the first two months of this year. By contrast, around 11 million undocumented people live in the U.S., according to 2022 data from the Pew Research Center.

Immigration law experts have previously told KQED that just because someone is in the U.S. without proper documentation, this does not necessarily mean they have a removal order against them. If you are currently in an active removal proceeding, you should have previously received a letter from the Executive Office of Immigration Review, which manages federal immigration courts.

Why does the IRS have the personal information of undocumented immigrants in the first place?

Individuals without a legal immigration status can pay taxes thanks to an individual taxpayer identification number (ITIN) granted by the IRS.

According to a 2024 report by the Institute on Taxation and Economic Policy, undocumented immigrants paid $96.7 billion in federal, state and local taxes in 2022.

The IRS started issuing ITINs in 1996 in order to improve tax collection among people without a Social Security number. Many people who use an ITIN to file are undocumented, although other groups — including the spouses of workers legally authorized to work in the U.S. and international students — use an ITIN as well.

Federal law blocks undocumented immigrants from receiving Medicare or Social Security retirement benefits — despite this group contributing massively to these programs — but many still do so in order to potentially improve their chances of obtaining legal immigration status.

Requesting an ITIN from the IRS can be a complicated process that requires applicants to send their foreign passports, along with other personal information, to the tax agency. And for decades, millions of undocumented immigrants shared their personal information with the IRS under the assumption that only the agency would have access to this data.

Is the IRS-ICE agreement legal?

In a statement to NPR, the Treasury Department, which oversees the IRS, insisted that the agreement with ICE is based on “longstanding authorities granted by Congress, which serve to protect the privacy of law-abiding Americans while streamlining the ability to pursue criminals.”

But legal experts KQED spoke to were critical of the government’s argument.

The agreement “doesn’t seem to truly meet the requirements of the law,” said Rosenthal from Asian Law Caucus. He points to the Internal Revenue Code (IRC), a set of laws established by Congress that the IRS must follow, including a section on how the agency must handle personal taxpayer data.

The IRC “imposed pretty stark requirements for information to be shared and even how that information can be used once it is shared,” Rosenthal said. Both the IRS commissioner and the agency’s chief privacy officer have resigned since news of the ICE deal emerged, which Rosenthal sees as “indications of just how radical this move is.”

Weeks before the IRS and ICE reached an agreement, immigrant advocacy groups in the Chicago area sued the Trump administration in order to prevent this type of data-sharing. “We think that this is illegal and unlawful,” said Michael Kirkpatrick, an attorney with Public Citizen Litigation Group, the legal aid organization that represents the plaintiffs in the lawsuit.

“If the IRS was just going to do what they’ve always done, which is share information on a very individualized case-by-case basis, they wouldn’t need this new memorandum of understanding,” he said, adding that his team has already heard from tax clinics that fewer people are filing taxes with an ITIN this year.

“The government is not going to get the benefit of that revenue, including the revenue that goes to Social Security and Medicare,” Rosenthal said. “The repercussions are going to be felt not just in the immigrant community, but by all of us.”

What are lawyers and advocates advising people who haven’t filed their taxes yet to do?

Since several sections of the memorandum of understanding are redacted, there are still parts of the IRS-ICE agreement that remain unclear. For example, advocates remain unsure of how far back ICE would be able to request existing tax records for undocumented immigrants since the part of the agreement that relates to this “taxable period or periods” contains a redaction.

United Way Bay Area, for its part, has issued a stark message of caution: “Given the current and evolving circumstances, including the potential risks involved, consider your own situation before proceeding with an ITIN application or tax filing,” Batson said.

Dozens of senators, including Alex Padilla of California, have requested a federal investigation into the IRS-ICE agreement. “Voluntary tax compliance depends on taxpayers having faith that their confidential information will not be used for anything other than tax administration,” reads the letter from lawmakers to the Inspector General’s Office, which conducts independent investigations of government operations.

Rosenthal said that anyone concerned about how the agreement could affect them should continue to monitor how this action from Congress progresses, along with the multiple lawsuits against the IRS over the deal.

In the short term, one option that is available to individuals who haven’t filed yet is to file an extension by Tuesday, if “they’re trying to decide what to do,” he said.

Bear in mind that if you owe money this year to the IRS, you will still have to pay a certain amount when requesting an extension, which usually gives filers an additional six months. Nonetheless, “that’s an option that’s available to folks who just want to see how this concerning situation plays out,” Rosenthal said.

Amid this uncertainty, if you are still anxious that filing taxes may complicate your immigration situation, the tax experts KQED spoke to recommend that you reach out to a legal services organization or a lawyer with whom you can discuss your situation and make a decision that is best for you and your family.

Read more information from the Asian Law Caucus for individuals filing their taxes with an ITIN.

This story includes reporting from NPR.