Why It Matters
The Internal Revenue Service (IRS) and Immigration and Customs Enforcement (ICE) entered into an information-sharing agreement in 2025 so the two agencies could collaborate on the enforcement of criminal immigration laws. The agreement allows the IRS to share confidential taxpayer data with ICE so the agency can pursue immigration enforcement tactics. A Congressional Research Service (CRS) Legal Sidebar updated September 17 tracks active federal litigation over this Memorandum of Understanding (MOU).
The central legal question is whether that agreement complies with Internal Revenue Code § 6103(i)(2), which authorizes disclosure of confidential tax return information to federal officers for nontax criminal enforcement under strict conditions.
Courts have placed enforceable limits on the IRS's ability to supply ICE with taxpayer address data at scale, and the IRS has admitted that some disclosures already made were legally deficient.
An amicus brief signed by 115 lawmakers argued the IRS-ICE arrangement "improperly challenges" Congress's power to protect taxpayer information and will deprive the federal government of tax revenue.
The Big Picture
The D.C. Circuit issued two rulings that cut in opposite directions. On February 24, the court affirmed the denial of a preliminary injunction against the MOU itself in Centro de Trabajadores Unidos v. Bessent, finding the agreement is not a reviewable final agency action under the Administrative Procedure Act and that the plain text of § 6103(i)(2) likely permits disclosure of taxpayer address information to ICE.
The court cited Loper Bright Enterprises v. Raimondo to reject reliance on the IRS's prior interpretations of the statute, holding the text was clear enough to require no deference to agency precedent.
On September 8, a three-judge D.C. Circuit panel unanimously affirmed a separate injunction blocking the IRS's automated bulk-transfer procedure in Center for Taxpayer Rights v. IRS, finding it violated the statute on at least two grounds: ICE was not required to submit a taxpayer's address in its request, and responses were routed to a single ICE employee rather than to officers "personally and directly engaged" in a specific investigation.
In 2025, ICE requested last-known addresses for approximately 1.28 million individuals; the IRS disclosed 47,289 addresses, of which 90.3 percent were matched solely by Taxpayer Identification Number without cross-checking the address field supplied by ICE, with some ICE-supplied fields containing entries such as "Unknown Address" or missing street names entirely.
A parallel case, Community Economic Development Center of Southeastern Massachusetts v. Bessent, produced a February 5 injunction barring ICE and the Department of Homeland Security from using any return information disclosed under the agreement, with the government's appeal pending before the First Circuit and oral argument scheduled for October 7.
Congressional oversight has intensified alongside the litigation, with eight senators sending a letter to the IRS and the Department of Homeland Security on February 12 demanding details about the legally deficient disclosures, and a House resolution introduced March 3 seeking records from the Department of the Treasury and the Department of Homeland Security regarding the data-sharing agreement.
The Bottom Line
CRS notes that Congress retains authority to amend § 6103(i)(2) to clarify or restrict these disclosures, meaning the statutory foundation for the program is not settled law, and with the First Circuit set to hear oral argument Oct. 7 and the motion to reopen discovery mooted by the D.C. Circuit's September 8 opinion in Centro, the legal landscape governing the administration's use of tax data for immigration enforcement could shift further.
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