IRS Reverses Stance, Will Hand Over Undocumented Taxpayer Info To Immigration Authorities: 'It's Unprecedented'

The Internal Revenue Service (IRS) has agreed to share certain tax information of undocumented taxpayers with Immigration and Customs Enforcement (ICE).

What Happened: The IRS's decision to share tax information with ICE was revealed in a document submitted against the court filing by the Department of Homeland Security (DHS). The document questions the legality of this type of data sharing, reported the NBC News. “There is an agreement that calls for information sharing, which is a reversal of what IRS said in the past it would not share,” said Alan Morrison the counsel on the case.

The agreement allows ICE officials to request information from the IRS about individuals ordered to leave the U.S. or those under investigation. This move is seen as part of President Donald Trump's mass deportation operation. Despite many without legal status paying billions in taxes, releasing personal tax information is considered illegal.

However, the law includes certain exceptions—such as when the information is used for non-tax-related investigations involving allegations or suspicions of violations of federal criminal law. Counsel Morrison stated that so far the deal is restricted to those exceptions.

Speaking about the Trump administration’s plans, Nina Olson, the executive director of the Center for Taxpayer Rights and a former top I.R.S. official told the New York Times, “It's unprecedented."

In another development, USA Today reported that Acting IRS Commissioner Melanie Krause is expected to resign, becoming the third leadership change at the agency since January. Her departure follows the IRS’s controversial decision to share tax data with the ICE.

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Why It Matters: This policy shift comes in the wake of President Trump’s aggressive stance on immigration. For months, IRS officials had resisted revealing closely protected information, but Trump has since installed new leadership at the agency who are more supportive of his plan to share taxpayer data.

On Monday, Trump received the green light to enforce the centuries-old Alien Enemies Act, enabling faster deportations of suspected gang members.

However, experts have raised concerns about the feasibility of Trump’s mass deportation plan, estimating it could cost nearly $1 trillion over a decade. The IRS’s decision to share tax information could potentially expedite the deportation process, but it remains to be seen how this will impact the overall cost and feasibility of the operation.

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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.