IRS under Trump unlawfully shared taxpayer info with immigration authorities, court rules

By Nate Raymond

Sept 8 (Reuters) – A U.S. appeals court on Tuesday upheld an injunction blocking an Internal Revenue Service policy that allowed it to share thousands of taxpayers’ addresses with immigration authorities, saying the Trump administration’s practice violated federal law.

A three-judge panel of the U.S. Court of Appeals for the District of Columbia Circuit ruled that the IRS last year disclosed roughly 47,000 taxpayer addresses to U.S. Immigration and Customs Enforcement under a procedure adopted as part of the administration’s efforts to expand immigration enforcement. 

The IRS and U.S. Department of Homeland Security, which oversees ICE, did not respond to requests for comment.

Under an agreement between the agencies, the IRS in July 2025 began processing ICE requests for the last known addresses of as many as 1.28 million people suspected of unlawfully residing in the United States.

The IRS adopted a procedure that allowed ICE to obtain information on taxpayers if it provided a five- or nine-digit number in an address field, even if that number was not an actual ZIP code.

Groups including the Center for Taxpayer Rights and the Main Street Alliance sued, arguing the practice was unlawful. A lower-court judge agreed and blocked the policy, by which time the IRS had already shared 47,289 records with ICE.

President Donald Trump’s administration on appeal contended the ruling hindered federal law enforcement.

“But that’s a gripe with Congress, not the court,” U.S. Circuit Judge Cornelia Pillard said in the appeals court’s ruling. 

Pillard, like the rest of the three-judge panel, was appointed by Democratic President Barack Obama.

After the Watergate scandal during President Richard Nixon’s era exposed abuses of U.S. taxpayers’ information, Congress barred the IRS sharing information with other government agencies unless they complied with stringent conditions.

Pillard said the procedures the IRS under Trump adopted violated federal law in numerous ways, including “most egregiously” by not even requiring ICE to provide an actual address for a taxpayer as legally required.

The practice, Pillard said, “automates the review of millions of records without any individual review or any other means of ensuring compliance with the legal prerequisites to releasing each individual taxpayer’s information.”

Skye Perryman, whose liberal legal group Democracy Forward represented the plaintiffs, in a statement said she was pleased the court “acted to stop this unlawful behavior.”

“The privacy laws enacted in the post-Watergate era exist to prevent abuses of power just like this,” she said.

(Reporting by Nate Raymond in Boston)