IRS reaches data-sharing deal with DHS to help find undocumented immigrants for deportation

By Marshall Cohen and Rene Marsh, CNN

(CNN) — The Department of Homeland Security and the Internal Revenue Service finalized an agreement Monday to provide sensitive taxpayer data to federal immigration authorities as part of President Donald Trump’s deportation push, according to court filings.

As part of the deal, the IRS agreed to turn over information about undocumented immigrants who DHS says are already facing deportation orders and are under federal criminal investigation, including for the crime of failing to leave the country, according to the filings.

Treasury Secretary Scott Bessent and Homeland Security Secretary Kristi Noem signed the agreement. CNN reported last month that the IRS was nearing a deal to help Immigration and Customs Enforcement track down undocumented immigrants for possible deportation.

The announcement comes after months of tension within IRS over the data-sharing plans and internal concerns from career officials about the legality of the collaboration. It also comes after a tense meeting last week between the two agencies as they worked to finalize the agreement.

The chaos has led to the resignation or impending departure of several senior IRS officials, amid the moral dilemmas posed to the agency by the Trump administration’s immigration push, according to multiple sources with knowledge of the situation. This includes the IRS’ chief privacy officer and others involved in safeguarding taxpayer data.

Parts of the 15-page “memorandum of understanding” are redacted, making it difficult to discern exactly what IRS will provide. But the terms of the deal say ICE will come to the IRS with the names and address of taxpayers that they believe have violated federal immigration laws.

The IRS would then cross-reference that information with existing taxpayer data and confirm its accuracy, CNN previously reported. IRS has addresses for undocumented immigrants because many members of that community register with the agency and pay billions of dollars in taxes each year – in exchange for their data staying confidential in most circumstances.

“The bases for this (memorandum of understanding) 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,” a Treasury spokesperson said in a statement.

This is the latest boost for Trump’s immigration agenda, after a favorable Supreme Court ruling Monday cleared him to use colonial-era laws to hasten some deportations, at least for now.

“It is so troubling” an IRS source told CNN of the impending data-sharing with DHS. “We ask (undocumented immigrants) to pay their taxes and do the right thing, and in exchange we will only use this information for tax administration. Now we are basically breaking their trust and the law and taking their information and using it to find them and deport them. It’s unethical when you think about what we’ve promised them.”

Data-sharing ‘is lawful,’ DOJ says

Liberal advocacy organizations, immigrant rights groups and Democratic lawmakers have slammed the Trump administration for trying to use IRS data to facilitate deportations.

They say this is a breach of trust because IRS data is supposed to stay confidential, and it will discourage undocumented immigrants from paying taxes in the future. CNN reported last week that some experts believe the uptick in requested tax filing extensions, compared with this time last year, can be attributed in part to resistance among undocumented immigrants.

Undocumented immigrants are often urged to register with the IRS and pay their federal taxes because it makes them look like law-abiding residents and could aid their immigration case.

The IRS-ICE deal repeatedly states that any cooperation between the agencies will be done in accordance with the federal laws that dictate when taxpayer data can – and can’t – be shared.

“Each request must be made consistent” with the tax code, and ICE will “ensure the proper handling, transmission, safeguarding, and security” of information it receives, the deal says.

Immigrant rights groups filed a lawsuit last month to block the IRS from turning over data to ICE. A judge declined to issue an emergency order, but another hearing is set for next week.

Justice Department lawyers said in a filing that the newly inked arrangement “is lawful.”

“The Memorandum of Understanding signed by the Department of the Treasury and DHS reiterates the agencies’ commitment to sharing information only in the way that (the federal tax code) permits and includes clear guardrails to ensure compliance,” they wrote Monday.

Lawyers from the liberal organization Public Citizen, who represent the immigrant groups, have argued that the arrangement doesn’t pass legal muster and are asking a federal judge to step in.

“The IRS has gone back on its duty to protect taxpayer information from improper disclosure,” attorney Nandan Joshi said about the deal with ICE. “If allowed to stand, this agreement will provide a roadmap for federal law enforcement to gain access to confidential taxpayer information without obtaining court order as required by law.”

The agreement also says ICE might use artificial intelligence to analyze taxpayer data, but it would need to notify the IRS’ Office of Safeguards to ensure it complies with federal law.

The IRS’ chief privacy officer – who is planning to leave the agency soon – has said in sworn affidavits, including one filed Monday, that the agency hasn’t yet turned over any taxpayer information to DHS or ICE since Trump took office.

Tense talks between IRS and DHS

Political appointees at the IRS stepped up their efforts last week to iron out the specifics of the data-sharing agreement with ICE and its legal constraints.

In a recent video call, DHS officials told IRS officials they needed access to their data to help them locate up to 7 million suspected undocumented immigrants – an eye-popping figure that “shocked” IRS employees, according to a source with knowledge of the meeting.

The DHS officials said they had names and addresses for the suspected undocumented immigrants, but they feared the information is outdated and inaccurate.

The source with knowledge also described moments of frustration among the DHS officials who at times appeared stumped when they learned that the IRS would only be able to confirm if they had a match in their system, and would not be allowed to provide new information like an updated or more accurate home address.

“They were not happy, and they were perplexed by the specificity of the law,” the source said.

Sources said the IRS employees left the meeting with suspicions that the DHS officials might mishandle the data and “may not intend to follow the law.”

Parade of IRS departures

The immigration deal, among other factors, triggered the ongoing exodus of senior IRS staff.

The agency’s chief-of-staff departed last week. The chief financial officer, chief privacy officer and chief risk officer have all notified leadership within the past few days that they will also depart.

One source with knowledge told CNN that several other senior leaders are actively considering accepting the agency’s second “deferred resignation” offer, which was sent to employees over the weekend.

“A large swath of leadership is leaving or considering leaving in the next couple of weeks,” the source said.

Their exit is seen by many at the agency as a loss of one of the last lines of defense against the potential unlawful use of taxpayer data by the Trump administration, including for immigration enforcement.

“It’s the immigration stuff, it’s the slashing and burning,” one source said.

This story has been updated with additional reporting.

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