In a system predicated on voluntary compliance, taxpayer privacy is an evergreen concern. But in recent weeks, three disparate events have raised questions about the security of taxpayer data—and what information the government should collect through the tax system.

What are these events? First, the Treasury Inspector General for Tax Administration’s report on IRS employees’ access to celebrity taxpayers’ return information. Second, allegations that IRS officials leaked an employee’s tax information to the Department of Justice in retaliation for whistleblowing. Third, the controversial inclusion of a citizenship or work authorization question on Form 1040, that hallowed pillar of individual filing and frequent political football.

Details and connections, below the fold.

At the end of September, TIGTA released a report revealing that 52 IRS employees accessed “30 different taxpayer accounts belonging to high-profile taxpayers.” These “suspicious accesses” occurred between 2022 and 2025—soon after former IRS contractor Charles Littlejohn’s massive leak of wealthy Americans’ tax return information placed the agency’s data-protection policies under renewed scrutiny. TIGTA’s study also was based on a limited list of “government officials, business leaders, and entertainers,” rather than a comprehensive analysis of IRS employees’ records retrievals. And the control gap that allowed these suspicious accesses was, well, to search by name—a loophole on par with combination locks coded with sequential digits. TIGTA’s understated bottom line: “the IRS lacks sufficient preventative controls to stop unauthorized access and has not effectively identified suspicious unauthorized accesses post access.”

In early October, an IRS special agent filed a lawsuit claiming that the IRS “illegally disclosed his employee and tax information to Justice Department prosecutors to discredit and fire him.” The motivation? Retaliation “for years of whistleblowing on the agency’s failure to tackle tax dodging,” including offshore structures used by multinational companies to avoid U.S. tax. The agent’s allegations are notable because they rely on breaches of privacy, rather than the agent’s employment rights. The agent’s PR pitch is straightforward: if confidential tax information can be used against an IRS employee who criticizes the agency, the dispute implicates more than his own job. There’s a public-trust argument that subsumes the more-pedestrian employment relationship.

Together, the foregoing items implicate both the scope of data collected through the federal tax system and the safeguards surrounding those data. And the data collected are growing. The Trump administration’s proposal to include a citizenship-or-work-authorization checkbox on individuals’ returns was well-covered in the mainstream press, and the enforcement-privacy stakes are well-traveled:

Administration officials argue the new requirement will help the federal government stop immigrants lacking permanent legal status from collecting federal benefits they are not eligible for, potentially saving taxpayers up to $2 billion. But taxpayer and privacy advocates say the data could be used to help find and deport those people.

The still-in-litigation information-sharing agreement between the IRS and Immigration and Customs Enforcement bears heavily on this proposed line-item, of course. But the nuts and bolts of access to taxpayer data—and the casual ease with which that information can be weaponized—loom larger as the IRS asks taxpayers to disclose more.

In a recent article, Joel Slemrod and Damián Vergara elaborate the broader tax-policy tradeoff. Equitable and efficient tax administration—a longstanding topic of Slemrod’s—requires lots of very personal information. On the other side of the ledger are individuals’ legitimate privacy interests, particularly when taxpayers care about leaks, disclosure, or uses of their data outside ordinary tax administration. For Slemrod and Vergara, the key concept is the tax system’s “granularity”—the degree of detail the tax authority collects about reported income and taxpayers’ personal circumstances. Their optimal-tax framework balances the marginal enforcement benefit of another piece of information against its marginal privacy cost.

Today’s controversies over access and disclosure emphasize that marginal costs must reflect institutional architecture as well as the substantive questions asked. Privacy depends on who can retrieve sensitive information, how access is monitored, the pathways of cross-agency information sharing, and what happens when formal safeguards fail. The case for information collection depends substantially on the credibility and integrity of the rules governing data access and use. In a tax system predicated on voluntary compliance, privacy interests are more than individual protections; they are integral to the bargain that makes the tax system’s administrative machinery work.

Related TaxProf Blog coverage:

• TIGTA: The IRS Provided Addresses for Nearly 47,000 Persons to ICE (June 27, 2026)
• Slemrod & Vergara: Optimal Tax Information with Privacy Concerns (June 6, 2026)
• ICE and the IRS: Inadvertent Disclosures Edition (Feb. 21, 2026)
• ICE and the IRS: Preliminary Injunction and Other Updates (Nov. 22, 2025)
• Brunson: Pay Taxes and Get Deported: Undocumented Immigrants and Tax Privacy (July 1, 2025)