House Democrats have sent a letter to Secretary of the Treasury Scott Bessent and Secretary of Homeland Security Kristi Noem seeking an unredacted copy of the memorandum of understanding allowing the IRS to share immigrant tax data with Immigration and Customs Enforcement (ICE).
The IRS has agreed to provide information about undocumented immigrants who are facing deportation orders and under federal criminal investigation, according to court filings. The court filings included a redacted version of the memo.
Under the agreement, the IRS will verify the names and addresses of immigrants provided on tax records to ICE. It’s unclear what other information may be provided by the IRS. However, an initial lawsuit suggests it could include information about dependents and other personal information.
Representatives Linda T. Sánchez (D-Calif.), Jimmy Gomez (D-Calif.), Debbie Wasserman Schultz (D-Fla.), Dan Goldman (D-N.Y.), and 43 of their House colleagues wrote in the letter that they had been made aware of the finalized agreement last week through the court filings. As part of their request for an unredacted version, they wrote, “We are troubled to hear that the Department of the Treasury has agreed to share taxpayer data with the Department of Homeland Security (DHS) to help the DHS target undocumented immigrants.”
The memo contained redactions in sections detailing information on the purpose of disclosure, the required criminal statutes triggering disclosure, the duties and responsibilities of the IRS and ICE, and the required information being disclosed. The representatives noted that they “are concerned” that the memo “will result in grave consequences for taxpayers whose information is shared.”
IRS Leadership
The IRS has generally prohibited sharing taxpayer information with other agencies and has resisted new pressure to do so. When news about the agreement broke, Melanie Krause, the acting commissioner of the IRS, announced that she was leaving her position.
Krause had stepped in as acting commissioner in early March following the retirement announcement of Doug O’Donnell. O’Donnell had served in the role for just a few short weeks following former IRS Commissioner Danny Werfel’s departure on January 20, 2025 (one week before the tax season officially kicked off). O’Donnell’s departure on February 28 marked a remarkable 39-day span of rotating commissioners. Krause becomes the third commissioner or acting commissioner to leave the agency in less than 80 days.
(Weeks after O’Donnell departed, acting IRS chief counsel William Paul was removed. Paul was reportedly demoted because he refused to cooperate with Elon Musk’s Department of Government Efficiency, as DOGE representatives allegedly sought to share taxpayer information with other federal agencies.)
Data Privacy
Why is IRS leadership balking at sharing the data? Traditionally, your tax data is not easily shared or transferred—even within the federal government. Section 6103 of the tax code bars federal employees from sharing tax returns and tax return information with third parties. This is a broad prohibition–it doesn’t just include copying and sending information. It also means discussions about returns, including something as simple as whether a taxpayer has filed a tax return, are not allowed. That’s why attorneys, accountants, and other tax professionals must provide the IRS with signed taxpayer authorizations before they can discuss taxpayer issues with the IRS, as well as why your mortgage company or student lender will ask for authorization before asking the IRS to confirm financial information.
Some exceptions may apply, including disclosures to other federal agencies or law enforcement, but those have been tightly controlled for decades.
The Trump administration has been making noise about sharing tax data in various scenarios, including allowing DOGE complete access to the Integrated Data Retrieval System (IDRS). The IDRS is a master file that includes tax returns and other taxpayer information, including bank records. Unfettered access to that data isn’t typically granted to anyone—even the IRS Commissioner. In a recent op-ed for Bloomberg Tax, Werfel wrote that if he, as the former IRS commissioner, had requested access to all the data in the IRS systems, “the agency’s data security team would rightfully say “no.” I would have no compelling need, and there was no legal basis for me to demand it.”
What Could Go Wrong?
As the information that has been requested expands to include immigration efforts, tax policy experts expressed concern about the breadth of the requests. According to attorneys Dahlia Mignouna and Brandon DeBot, and Chye-Ching Huang, director of the New York University Tax Law Center, the planned information sweep initially targeted 700,000 immigrants allegedly subject to final deportation orders, but the latest reporting indicates that it may now be targeting the tax data of a far broader group: 7 million immigrants.
That raises concerns about how accurate and timely the data might be—and what the collateral damage could look like. Administrative errors could result in potentially disastrous consequences, as recently illustrated by the case of a Maryland man who was mistakenly deported with the government making no effort to get him back, despite a Supreme Court ruling.
What Comes Next?
Emails to IRS seeking confirmation about who would take over the role were not immediately returned. However, after publication, Treasury confirmed that “Melanie Krause will be acting IRS Commissioner until at least May 15th, where she will continue the hard work of re-structuring and modernizing the IRS. Former Congressman Billy Long is awaiting his Senate confirmation, and as IRS Commissioner, he will enact Secretary Bessent’s priorities for the department to better serve the American taxpayer.”
A confirmation hearing for Long has not yet been scheduled. Werfel, who was nominated by President Biden on November 10, 2022, didn’t face the Senate until February 2023. Charles Rettig (who served before Werfel after being nominated by President Trump) waited about seven months for confirmation.
You can read the complete text of the letter here.
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