On April 7, the Internal Revenue Service and Immigration and Customs Enforcement (ICE) reached an agreement to share sensitive taxpayer information of undocumented taxpayers.
This historic memorandum of understanding (MOU) prompted several high-ranking IRS officials, including the then acting agency commissioner, to resign in protest.
The key concern of IRS personnel then and now is the violation of taxpayer privacy. That guarantee of taxpayer information is one of the pledges in the IRS’ Taxpayer Bill of Rights (TBOR).
Taxpayers have the right to expect that any IRS inquiry, examination, or enforcement action will comply with the law and be no more intrusive than necessary, according TBOR's privacy plank.
In essence, the right to privacy is a way to keep the IRS from delving any deeper into our lives than it needs to in order to do its job.
Tax law, not immigration, enforcement: That promise of privacy was especially important to taxpayers who are not in the United States legally.
The IRS’ position when it came to these filers used to be that it didn’t care about their immigration status. The federal tax agency noted that its job is to collect legally due tax from all taxable income earned by individuals, not to police their residency status.
Millions of undocumented workers took the IRS at its word, filing annual tax returns using Individual Taxpayer Identification Numbers, or ITINs. They did so in part because they had been told that evidence of following the country’s tax laws could it could help in their efforts to gain legal U.S. status.
How things have changed.
Campaign promise chaos: Mass deportation was a perpetual rallying cry at Donald Trump campaign rallies. He kicked off his second term making good on that promise.
And, as Trump is wont to do, he bent existing government rules.
The IRS-ICE MOU is a prime example. Or, as Samuel D. Brunson, Associate Dean for Academic Affairs and Georgia Reithal Professor of Law at Loyola School of Law (Chicago), puts it his paper published on SSRN, pay taxes and get deported.
The full, official title of the paper by Brunson, is Pay Taxes and Get Deported: Undocumented Immigrants and Tax Privacy. And it gets this weekend’s first Saturday Shout Out.
In the paper’s abstract, Brunson notes, the IRS has more information about more Americans than any other agency in the United States. In the wake of a number of scandals and perceived scandals in which high-ranking officials tried to access that information for personal and/or political gain, Congress enacted laws to protect taxpayer privacy.
“Over the subsequent fifty years, that congressionally-mandated confidentiality largely held. But over the course of 2025, it began to unravel,” added Brunson.
He elaborates in the paper:
That the IRS and ICE could enter into this agreement is a testament to the fact that the confidentiality provisions of the Code rely as much on norms as they do on law. Because “Congress delegated the power to execute and enforce the Internal Revenue Code to the Internal Revenue Service, which is part of the executive branch,” it is hard to imagine an Executive Branch, unbound by norms, that wants to access tax return information being bound by a law it chooses to enforce or not.
Congressional clarification needed: That’s why, says Brunson, Congress needs to rethink its privacy regime.
“Instead of relying on the goodwill of the Executive and its willingness to voluntarily comply with the law, Congress needs to design a system that will preserve taxpayer privacy even where the IRS is willing to comply with questionably-lawful requests for information,” writes Brunson.
He makes two suggested changes.
- The government make individual taxpayer identification numbers indistinguishable from Social Security numbers.
- The government establish registered agent-style offices for lower-income taxpayers that will allow them to file tax returns without using their home addresses.
These two changes, argues Brunson, “will provide a level of taxpayer confidentiality more in line with Congress's intent. It will allow undocumented taxpayers to file and pay taxes without fear of deportation. And it will allow the IRS to focus on its revenue-related mission.”
Cost of deportations: That mission is hampered by the IRS ICE MOU, as discussed in this weekend’s second Saturday Shout Out to Aravind Boddupalli’s piece for the Tax Policy Center’s Tax Vox blog, The New ICE-IRS Data Sharing Agreement Has Three Problems.
In short, says Boddupalli, using IRS data a deportation tool may
- Reduce tax revenues;
- Undermine effective governance and data practices; and
- Worsen the well-being of many children and families.
I’ll let you read Brunson’s and Boddupalli’s takes on immigration and taxes at your leisure.
As for my weekend plans, I’m going to work on upgrading security protocols for all my personal data. Just in case.
You also might find these items of interest:
- IRS emphasizes its commitment to taxpayer privacy
- Mismatched tax ID numbers worry workers, employers and Social Security
- Undocumented immigrants in U.S. pay nearly $100 billion in federal and state taxes
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