WASHINGTON — When undocumented immigrants file their taxes, they do so under a statutory promise: what the Internal Revenue Service knows about them stays with the IRS. A federal appeals court ruled this week that the Trump administration shattered that promise, and the judges were not gentle about it.
A unanimous three-judge panel of the U.S. Court of Appeals for the D.C. Circuit upheld an injunction blocking the IRS from sharing taxpayer address data with Immigration and Customs Enforcement, finding that the agency’s arrangement with ICE violated a decades-old tax privacy statute born out of Watergate-era abuses. The ruling came as the administration has pushed to expand immigration enforcement tools across every corner of the federal government, treating agencies historically insulated from law enforcement work as untapped sources of intelligence.
The legal foundation of the ruling is Section 6103(i)(2) of the Internal Revenue Code, enacted in 1976 after the Nixon administration was found to have used taxpayer records for political targeting. The statute tightly restricts when and how tax information can be shared with other agencies. The D.C. Circuit found the IRS’s arrangement with ICE fell far outside those limits. That finding arrived against a backdrop of taxpayer data vulnerabilities that drew congressional scrutiny earlier this year, when unauthorized contractor access to IRS records triggered an internal crisis at the Treasury Department.
The program’s scale was striking. Through a memorandum of understanding signed in April 2025, ICE requested the home addresses of 1.28 million people it suspected of being in the country illegally. Before a lower court froze the arrangement, the IRS had already turned over approximately 47,289 addresses. Judges noted that in a single week in August 2025, the agency shared more taxpayer data with a law enforcement arm than it had provided to all of federal law enforcement combined during the entire preceding year.
Judge Cornelia Pillard, writing for the panel, was blunt. The administration’s legal argument in defense of the data-sharing was, she wrote, “weak sauce.” Her opinion went further, putting agency officials on notice: “The IRS is now on notice twice over regarding the legal inadequacies of its summer 2025 disclosures. The government and its personnel face steep civil and criminal consequences for willful disclosure of information.” Pillard was joined by Judges Patricia Millett and Robert L. Wilkins.
The lower court ruling the panel affirmed was issued by U.S. District Judge Colleen Kollar-Kotelly, who had concluded the IRS-ICE memorandum of understanding exceeded the agency’s statutory authority from the start.
The plaintiffs who brought the case, including the Center for Taxpayer Rights, Main Street Alliance, Communications Workers of America, and the National Federation of Federal Employees, argued that compromising the confidentiality of taxpayer data would discourage compliance with tax law. The argument resonates: the IRS relies heavily on voluntary filing, and the immigrants most affected by the program are required by law to pay taxes regardless of their immigration status. Many use Individual Taxpayer Identification Numbers precisely because they lack Social Security numbers but still need to file legally.
The practical consequences of the 47,289 addresses already shared remain uncertain. Immigration enforcement moved fast in 2025 and 2026, with the administration deporting individuals to countries where they had no known connections and revoking more than 175,000 visas at a pace that shattered historical records. How many of the people whose addresses were transferred before the injunction have since been located or removed is not publicly known.
What the court has not yet resolved is whether the damage already caused can be reversed. The injunction blocks any future sharing of information, but the legal remedy for disclosures that have already occurred — including the 47,289 addresses now in ICE’s possession — remains a separate issue that could require further litigation before the district court. Judge Pillard’s warning about potential criminal consequences for willful disclosure indicates that the appeals court regarded the conduct as more serious than a mere bureaucratic overstep. Yet criminal accountability for federal officials acting pursuant to administration directives has historically been difficult to establish.
The ruling nevertheless represents a significant constraint on one of the administration’s more unconventional immigration enforcement strategies. The Supreme Court, however, has previously granted the administration relief in immigration-related disputes, meaning an emergency application seeking to lift the injunction while the underlying case proceeds cannot be ruled out.
For now, the 1.28 million addresses sought by ICE will remain within the tax system, the same system Congress decided, in the year Richard Nixon left office, should keep such taxpayer information protected.
