Federal Judge Blocks ICE from Using Taxpayer Data

A federal judge has ruled against Immigration and Customs Enforcement (ICE) from accessing taxpayer information to locate undocumented immigrants. U.S. District Judge Indira Talwani, appointed by President Barack Obama, instructed the Internal Revenue Service (IRS) to cease sharing personal addresses with ICE, citing concerns over taxpayer privacy rights. The decision is a setback for the Trump administration’s attempts to incorporate IRS data in a broader deportation strategy.

Judge Talwani highlighted that both public interest and the balance of hardship favor maintaining interagency data-sharing agreements that comply with the law. “Implementing policies that contradict legal standards undermines the foundation of trust in the tax system,” she noted.

She also pointed out the risks involved. Misidentification can occur with both citizens and noncitizens, potentially leading to wrongful arrests. The data requested wouldn’t pertain to specific investigations, meaning that it would include information on individuals with deferred action status, complicating the situation further.

Beginning in early 2025, IRS officials reportedly entered discussions with the Department of Homeland Security about sharing tax data. This agreement would grant ICE access to personal details about undocumented immigrants, including their home addresses.

While federal law protects taxpayer information, there are exceptions allowing the IRS to share pertinent details with federal law enforcement when assisting in criminal inquiries. However, Judge Talwani warned that such sharing could have a “chilling effect” on tax compliance among immigrants and could result in innocent legal immigrants being wrongly targeted.

This ruling makes Judge Talwani the second federal judge to temporarily halt such intelligence-sharing agreements, alongside U.S. District Judge Colleen Kollar-Kotelly, who previously argued that these arrangements violate taxpayer confidentiality. The Trump administration is appealing that earlier ruling.

Additionally, President Trump is involved in a lawsuit against the IRS and Treasury Department for approximately $10 billion over the unlawful disclosure of his 2019 tax information. His sons, Donald Jr. and Eric, as well as the Trump Organization, are part of this case. This follows the sentencing of former IRS contractor Charles Littlejohn, who was imprisoned for leaking years of the president’s tax records to news organizations.