The IRS and ICE have signed a Memorandum of Understanding (MOU) that allows the IRS to share taxpayer information such as names, addresses, and tax data, with ICE for immigration-related criminal enforcement of individuals subject to final removal orders or under criminal investigation for violations such as failing to leave the country after 90 days.
This April 7, 2025 MOU, outlined in a previous client alert, poses significant issues for tax and immigration law practitioners, tests the boundaries of Internal Revenue Code Section 6103, challenges longstanding privacy norms, and may significantly disrupt voluntary compliance with U.S. tax laws.
A Significant Policy Shift
Historically, the IRS has guarded taxpayer confidentiality. Section 6103 was enacted after the Watergate-era abuse of tax data, ensuring that IRS records would not become tools of political or law enforcement retaliation. Section 6103 establishes a broad confidentiality rule: taxpayer information and tax return information are not to be disclosed by the IRS unless specifically authorized. IRS officials have reiterated this standard in past enforcement guidance, warning that immigration enforcement does not, in itself, justify tax data disclosures.
This MOU marks a departure from that policy. It aligns the IRS, for the first time, with the Department of Homeland Security in operational immigration enforcement.
The Memorandum of Understanding
Under the MOU, the IRS agrees to share tax return information with ICE pursuant to Section 6103(i)(2). This subsection of Section 6103 allows certain disclosures for non-tax criminal enforcement purposes with strict procedural safeguards, including detailed justifications and a demonstration of relevance to a designated federal criminal statute.
Historically, this provision has been narrowly interpreted. Information sharing with immigration enforcement has typically been disallowed where the enforcement concerns are civil such as in standard deportation proceedings. The MOU changes that by explicitly grounding ICE’s access to IRS data in 8 U.S.C. § 1253(a)(1), a criminal statute governing willful failure to depart after removal.
The MOU establishes procedures for when ICE can request and receive taxpayer names, addresses, and other tax data for individuals who are (1) under final orders of removal and (2) under criminal investigation under specific federal statutes, including 8 U.S.C. § 1253(a)(1). To obtain this information, ICE must submit a written request to the IRS identifying:
- The targeted individual.
- The relevant taxable periods.
- The specific nontax criminal statute.
- A statement showing why the information is relevant to the investigation.
Although the MOU emphasizes compliance with Section 6103(i)(2), it also delegates significant discretion to the IRS and ICE to develop a separate implementation agreement, the contents of which are not publicly disclosed.
Moreover, even though the IRS states it will verify whether each request satisfies legal requirements, the sheer scope of the MOU, combined with limited public or judicial oversight, opens the door to possible abuse.
Legal Risks and Potential Challenges
Although the MOU asserts compliance with Section 6103(i)(2), it could face challenges:
- Civil vs. Criminal Distinction: Immigration violations such as overstaying a visa or lacking legal status are civil, not criminal, offenses. The MOU justifies disclosure by tying it to criminal charges like failure to depart. Courts may question whether these charges are a pretext to gain tax data for civil enforcement.
- Lack of Judicial Oversight: Disclosures under Section 6103(i)(2) do not require court approval. This procedural gap is magnified by the lack of transparency in how the IRS determines the legitimacy of ICE’s requests.
- Potential Violation of Due Process: Immigrants targeted for enforcement based on IRS data may face procedural irregularities if incorrect or outdated information is used against them, including mistaken identity or administrative error. These due process concerns could invite constitutional litigation, especially under the Fourth and Fifth Amendments.
- Chilling Effect on Voluntary Compliance: Section 6103’s confidentiality protections were designed to protect the integrity of the voluntary tax system. When taxpayers fear their information will be shared with ICE, filing incentives disappear, undermining tax compliance.
Practical Considerations for Immigration and Tax Attorneys
Attorneys advising immigrants, noncitizens or mixed-status families should treat tax compliance as a potential enforcement risk, especially when clients have past removal orders, open immigration cases, or prior contact with ICE. Here are specific recommendations:
For Immigration Attorneys:
- Screen for Tax Compliance Risks: Ask clients if they have filed taxes using an ITIN or previously submitted tax forms that might now be in IRS databases. Where relevant, request IRS account transcripts to assess exposure.
- Avoid Assumptions of Privacy: Advise clients that tax return information may no longer be secure from ICE access, especially if there is a pending or final removal order. Evaluate whether filing or amending returns could increase enforcement risk.[SK1]
- Challenge Disclosures: In removal proceedings, if ICE introduces taxpayer information, consider filing motions to suppress under Section 6103 and the Fourth Amendment. Raise objections about the legality of the MOU-based disclosure and seek documentation of the request.
- Monitor Procedural Errors: Because IRS records are not designed for immigration enforcement, look for incorrect or mismatched data in ICE records, which could form the basis of suppression arguments or due process defenses.
For Tax Practitioners:
- Assess Filing Decisions Carefully: When advising undocumented clients on filing returns with ITINs, provide a full discussion of privacy risks and explain the potential for ICE data access.
- Protect Client Files: Store and transmit client documents with care. Be aware that even tax preparers can face liability for unauthorized disclosures of return information.
- Coordinate With Immigration Counsel: If a client faces immigration proceedings, discuss the timing and content of any tax filings with their immigration attorney. Consider delaying certain filings if they may be used in enforcement actions.
- Track IRS Guidance: Watch for IRS press releases, FAQs, or IRMs addressing the MOU. If new procedures develop, incorporate them into your client advisories.
This MOU marks a turning point in the relationship between taxation and immigration enforcement. While it is framed in terms of narrow criminal investigation exceptions, the broader implications are profound. Lawyers must remain vigilant to protect their clients.
[View source.]
