IRS building system to share taxpayer data with ICE

The IRS is developing an automated system to allow Immigration and Customs Enforcement (ICE) "on demand" access to taxpayer addresses, an unprecedented incursion into confidential tax data, according to ProPublica’s reporting and recently unsealed court records.

Last month, acting IRS general counsel Andrew De Mello was ousted after resisting a DHS request for 7.3 million taxpayer addresses—he flagged legal "deficiencies" and lack of proper criminal investigations. Within days, De Mello was forced out and replaced. The move came as ICE—operating under sharply increased daily arrest quotas—relied on the prospect of large-scale IRS data sharing to fuel deportation operations well beyond traditional targeted law enforcement.

Under federal law (26 USC § 6103), taxpayer return information—including individual addresses—has strong confidentiality requirements. While information can be shared for criminal investigations, ICE’s recent requests were seen by many experts as a "big data dump" untethered from criminal probes, raising alarm among privacy advocates and prompting a legal challenge that reached US District Court.

Though the new IRS-DHS memorandum of understanding maintains statutory guardrails, critics argue that automated access could result in overreach and erroneous targeting, further eroding trust among immigrant taxpayers.