ICE and the IRS: Preliminary Injunction and Other Updates

On Friday, November 21, Judge Colleen Kollar-Kotelly issued a preliminary injunction barring the IRS from sharing certain taxpayer data with the Department of Homeland Security, stayed an April information-sharing agreement between the IRS and Immigrations and Customs Enforcement, and ordered the IRS to inform the District Court for D.C. before making further disclosures of taxpayer data. The opinion is here.

These rulings follow late-October filings of administrative record in the case, Center for Taxpayer Rights v. IRS, No. 1:25-cv-00457 (D.D.C.), that yielded details on the taxpayer records sought by ICE in spring and summer 2025, as well as the IRS’s resistance to ICE’s requests. Relevant coverage follows.

Tristan Navera, DHS, ICE Access to IRS Taxpayer Records Blocked in Federal Court, Bloomberg (Nov. 21, 2025):

A judge barred the IRS from sharing data on millions of American taxpayers with the Department of Homeland Security after determining that taxpayer and labor groups can challenge the practice. . . .

The case pushes back against what the plaintiffs say is part of a larger effort to reshape and dismantle parts of the federal government. It’s one of a series of interrelated suits over access to private citizens’ data.

Nathan J. Richman, Federal Court Halts IRS Immigration Data Sharing, Tax Notes Today Fed. (Nov. 21, 2025):

Kollar-Kotelly noted that she didn’t have ICE in front of her in the court room and ordered Treasury Secretary and acting IRS Commissioner Scott Bessent to pass along her conclusion that the 47,000 pieces of tax return information the immigration agency received so far [in August 2025] came from a likely violation of section 6103[, which restricts the disclosure of tax returns and return information].

Danny Nguyen, ICE Made Expansive Request for Taxpayer Data Amid IRS Pushback, Politico (Oct. 30, 2025):

[In February 2025, f]ederal immigration enforcement officials sought a wide range of sensitive information about suspected undocumented immigrants from the IRS, including the names of relatives, before narrowing the request amid pushback from agency officials, according to a new court filing. . . .

ICE spent weeks asking for this data, even as IRS staffers mulled over the legality and practicality of the information exchange, the records show. . . .

The immigration enforcement agency eventually found a workaround: It could slap a federal criminal penalty for failure to leave the country on the undocumented immigrants to spur a criminal investigation . . . .

And [ICE] could tighten the scope of [its] data probe to only seek names, addresses and other qualifying information within a taxable period.

The IRS and ICE—which continued to squabble over the minutiae of section 6103 over the summer—contend they’ve worked out the kinks, though it is unclear from the latest emails alone if that’s true.

Richard Rubin, How the IRS and ICE Tussled During Trump’s Deportation Push (Oct. 30, 2025):

The tax agency moved from flat rejection of February’s broad requests to a much narrower August disclosure. . . .

By early April, the IRS and ICE had reached a far narrower agreement in a memorandum. . . .

The April agreement didn’t lead to a quick transfer. The IRS and ICE had to work out technical and legal details of file sharing. According to the documents, IRS and Treasury officials pushed back against ICE files that didn’t contain all of the required information for each person, such as an address and specified tax years.

As late as June 25, the IRS’s acting top lawyer was pointing out multiple shortcomings in an ICE request for 7.3 million records. . . .

Once ICE complied with those requirements with a request for 1.3 million records, it took another month for the IRS to test and transmit the data. The IRS found matches in less than 4% of cases—just 47,289.

Related TaxProf Blog coverage: