New DHS-IRS Agreement: Big Change in Illegal Immigration Fight

The Internal Revenue Service (IRS) and Department of Homeland Security (DHS) have struck a historic agreement allowing Immigration and Customs Enforcement (ICE) to access taxpayer information to locate illegal immigrants who have received final deportation orders, while the IRS Commissioner resigns in apparent protest.

Key Takeaways

A memorandum of understanding between DHS and IRS establishes a process for ICE to request tax information on illegal immigrants already under criminal investigation.
The agreement specifically targets individuals who have overstayed 90 days after a judge’s final removal order.
Acting IRS Commissioner Melanie Krause has resigned following the deal, reportedly in protest of the administration’s actions.
A federal judge has rejected immigrant rights groups’ request for an emergency injunction to block the information sharing.
As of filing, the IRS confirms it has not yet received any requests for taxpayer information from DHS or ICE.

New Tax Data Sharing Framework Established

The Department of Homeland Security and the Internal Revenue Service have formalized an agreement that will allow Immigration and Customs Enforcement to access taxpayer information for locating illegal immigrants subject to deportation. The memorandum of understanding (MOU) creates a secure process for DHS to request specific return information on individuals already under criminal scrutiny who have overstayed deportation orders by more than 90 days. This collaboration represents a significant shift in interagency cooperation on immigration enforcement.

Treasury officials emphasize the agreement’s adherence to established legal frameworks. “The Internal Revenue Service and the Immigration and Customs Enforcement have entered into a memorandum of understanding to establish a clear and secure process to support law enforcement’s efforts to combat illegal immigration,” a Treasury Department spokesperson stated. “The bases for this MOU are founded in longstanding authorities granted by Congress, which serve to protect the privacy of law-abiding Americans while streamlining the ability to pursue criminals.”

The IRS has agreed to share immigrants’ tax information with ICE to facilitate deportations. pic.twitter.com/Vn91M7RxEw

— Pop Base (@PopBase) April 8, 2025

IRS Leadership Fallout

In a significant development following the announcement, acting IRS Commissioner Melanie Krause has submitted her resignation. Reports indicate her departure comes in protest of the data-sharing arrangement, which was signed by Treasury Secretary Scott Bessent and Homeland Security Secretary Kristi Noem. The agreement reportedly bypassed Krause, who had expressed concerns along with other IRS officials that the policy might violate privacy laws and potentially hinder tax collection from undocumented immigrants.

Legal Challenges and Privacy Safeguards

Immigration advocacy groups and Public Citizen quickly mounted a legal challenge to prevent the information sharing, but US District Court Judge Dabney L. Friedrich declined to issue an emergency injunction, stating that the plaintiffs “have not established a likelihood of success on the merits.” The ruling allows the data-sharing program to proceed while addressing concerns about taxpayer privacy. Democratic senators have requested additional information about how DHS might access IRS systems, expressing worry over potential misuse of tax data.

“DHS and ICE must safeguard any return information disclosed by the IRS,” government lawyers emphasized in court filings, highlighting the compliance requirements with federal privacy laws.

Implementation Status and Impact

Despite the framework being in place, the IRS has confirmed it has not yet received any requests for taxpayer information from DHS or ICE as of the filing date. The IRS has historically allowed illegal immigrants to file tax returns using Individual Taxpayer Identification Numbers (ITINs), which has resulted in significant contributions to Social Security taxes. Some officials have raised concerns that the new policy could discourage tax compliance among undocumented immigrants and create confusion about the intended use of the criminal exception provisions in tax law.

Under the agreement, ICE can confirm addresses of illegal immigrants with final removal orders by cross-checking IRS tax records. DHS spokesperson Tricia McLaughlin stated, “Under President Trump’s leadership, the government is finally doing what it should have done all along: sharing information across the federal government to solve problems.”