IRS rejected request for addresses of people believed to be in U.S. illegally

Internal Revenue Service leaders rejected a recent request from immigration enforcement officials to divulge the home addresses of 700,000 people suspected of being in the country illegally, rebuffing a Trump administration attempt to leverage the tax service to assist a sweeping immigration crackdown.

In a memo obtained by the Washington Post, Department of Homeland Security authorities asked the IRS on Thursday to connect the names of potentially undocumented immigrants with the people’s last known address, phone number and email address.

It follows a DHS request roughly two weeks ago that would allow immigration officials to provide a list of names to the IRS in hopes of obtaining home addresses from the tax agency, according to five people familiar with the situation who spoke on the condition of anonymity out of fear of professional reprisals.

The Thursday memo also asked the IRS to deploy dozens of highly skilled IRS auditors and criminal investigators to launch probes of businesses suspected of hiring immigrants not authorized to work in the United States.

“IRS investigations should be conducted, and assistance should be provided without regard for any threshold, floor, or internal policy for opening an investigation,” the memo states. “Further, IRS should provide leads on businesses that are circumventing tax laws or violating worksite-related statutes, many of which are from prior leads or complaints that IRS did not investigate due to not meeting internal IRS policy for opening an investigation.”

IRS leaders rejected the DHS requests, the people said, and are attempting to negotiate terms to assist immigration enforcement officials without violating tax privacy laws. The memo suggests the creation of a team of IRS officials to review taxpayer data so it is not accessed by DHS personnel.

The memo and requests have prompted deep alarm within the IRS, the people said. Providing taxpayer information to third parties is punishable by both civil and criminal penalties, and other government entities are forbidden from ordering tax investigations. People familiar with DHS’s requests described them as “Nixonian,” referring to how President Richard M. Nixon’s administration used the IRS to collect information about perceived enemies. Abuse of the tax system was one of the articles of impeachment filed against Nixon in 1974, though he resigned before impeachment proceeded.

The IRS has reassured undocumented immigrants for years that their information is confidential and that it would be safe for them to file income tax returns reflecting their earnings without fear of being deported.

When some immigrants were rattled about filing taxes after Trump took office in 2017, the IRS said the law doesn’t allow the agency to share personal tax information with another government agency.

“There is no authorization under this provision to share tax data with ICE,” the IRS said then.

Representatives from the Department of Homeland Security and the IRS did not immediately respond to requests for comment.

Undocumented immigrants pay billions of dollars in federal taxes every year by filing annual returns or having money withheld from their paychecks.

An estimated half – possibly more – of the roughly 11 million undocumented immigrants in the country file income tax returns, researchers say, to document their contributions to the United States. Because most are ineligible for Social Security numbers, the IRS allows them to file with individual taxpayer numbers, known as ITINs, instead.

Tax data can provide precise information about potentially undocumented immigrants, including their addresses, family structures, and bank and employment information, experts say.

But even a taxpayer’s name and home address are considered protected data under federal law, said Nina Olson, who was the national taxpayer advocate, the IRS’s internal watchdog, from 2001 to 2019.

“These 700,000 names: Do they sound like Jones and Smith, or do they sound like Rodriguez and Garcia?” said Dorothy A. Brown, who studies tax policy and racial disparities at Georgetown University Law Center, referring to the list DHS sought to send to the IRS. “This is racial profiling on steroids.”

A federal official, who spoke on the condition of anonymity to discuss the sensitive issue, said ICE may view the IRS databases as valuable for pinpointing undocumented immigrants because tax returns often contain recent information such as current workplaces, names and ages of children, and home addresses. ICE is tracking nearly 8 million undocumented immigrants on its deportation docket, but immigrants often do not update their addresses with the enforcement agency.

Sharing taxpayer information would mark a major reversal for the IRS. Many immigrants proudly file tax returns and save them in hopes that a record of paying taxes will bolster their efforts to apply for legal residency one day, if Congress passes a law allowing it.

On its website, the IRS says undocumented immigrants “are subject to U.S. taxes in spite of their illegal status.”

Undocumented workers’ wages are subject to the same tax withholding and reporting requirements that apply to other U.S. residents. But working illegally is a risk: Workers and employers who hire them could face fines or criminal prosecution.

Even though the IRS doesn’t share taxpayer information, the agency’s criminal division has teamed up on investigations with DHS in the past. That is a possible tactic for the new Trump administration, which is increasingly seeking to file criminal charges against immigrants who are in the United States illegally.

For instance, Homeland Security Investigations and the IRS jointly investigated a human smuggling network that was funneling workers who were from Mexico, El Salvador, Indonesia and Guatemala to Gracie’s Chinese Cuisine restaurant in Evansville, Indiana. The investigation began in 2020 during Trump’s first term and ended under Joe Biden’s.

The owner pleaded guilty to transporting and harboring undocumented workers and money laundering in 2022 and was sentenced to time served and ordered to pay a $30,000 fine and forfeit his truck. The restaurant also pleaded guilty to unlawful employment of undocumented workers and was sentenced to two years’ probation and fined $15,000.