Federal Courts Split on IRS-ICE Data Sharing: Your Tax Records at Stake

TL;DR:

February 24, 2026: The DC Circuit Court of Appeals ruled the IRS can share taxpayer addresses with ICE for immigration enforcement
February 5, 2026: A Massachusetts federal court blocked the exact same program, calling it likely illegal
Three IRS commissioners have resigned over the data-sharing deal since January, including Acting Commissioner Melanie Krause
1.28 million names submitted by ICE. 47,000 matches returned in 24 hours. 2,350 addresses shared improperly.
Circuit split almost guarantees Supreme Court review. Until then, your tax data is in legal limbo.

Two Courts. Opposite Answers.

On February 24, 2026, the U.S. Court of Appeals for the DC Circuit sided with the Trump administration. In Centro de Trabajadores Unidos v. Bessent, Judges Harry T. Edwards, Sri Srinivasan, and Patricia A. Millett ruled that the IRS can share taxpayer addresses with Immigration and Customs Enforcement under Section 6103 of the Internal Revenue Code.^[1]

Judge Edwards wrote that plaintiffs were wrong to argue that a court order is required before the IRS hands over addresses: "In fact, a court order is not mentioned in the provision. Appellants' insistence that a court order is required thus has no support in the statute."^[1]

Three weeks earlier, Judge Indira Talwani in Massachusetts reached the opposite conclusion. On February 5, she blocked the entire program. Her 42-page order barred DHS Secretary Kristi Noem, ICE Acting Director Todd Lyons, and all their agents from "inspecting, viewing, using, copying, distributing, relying on, or otherwise acting upon any return information" obtained through the IRS deal.^[2]

Same law. Same facts. Two federal courts. Opposite rulings.

Three Commissioners. All Gone.

Danny Werfel, Biden's IRS Commissioner, left on Inauguration Day. His successor Doug O'Donnell retired in February 2025 after refusing to sign the data-sharing agreement with DHS. Then came Melanie Krause.^[3]

Krause was Trump's pick. She resigned in April 2025, right after Treasury Secretary Scott Bessent and DHS Secretary Kristi Noem finalized the agreement. Two other senior IRS officials (chief privacy officer Kathleen Walters and chief privacy officer Teresa Hunter) also walked out.^[3][4]

Multiple senior IRS officials refused to put their names on the document. They believed it violated taxpayer privacy law. The deal got signed anyway.

What Actually Happened

On August 6, 2025, ICE submitted 1.28 million names and addresses to the IRS. One day later, the IRS returned data on approximately 47,000 confirmed matches.^[5]

But the IRS made a mistake. For roughly 2,350 people, the agency shared home addresses even when ICE's submitted data was incomplete, violating the agreement's own terms. An IRS employee stored the entire batch on their personal computer, which Judge Talwani ruled was "impermissible storage" under tax law.^[2][5]

The Treasury Department told DHS to stop using the improperly shared data in January 2026. Whether that data was already copied, forwarded, or used to conduct arrests is unknown.

Section 6103: The Law at the Center

Section 6103 exists because Richard Nixon weaponized IRS files against his enemies. Congress responded by making taxpayer information confidential, period. Unauthorized disclosure is a federal crime: up to five years in prison per offense.^[6]

The law has narrow exceptions. One allows sharing for "nontax law enforcement" purposes. The administration argues immigration enforcement fits that carve-out. Critics say the exception was meant for targeted criminal investigations, not bulk data requests covering 1.28 million people.

The DC Circuit bought the administration's argument. Judge Talwani didn't.

That's the definition of a circuit split. And circuit splits often get Supreme Court attention.

The Tax Filing Problem

Here's why this matters beyond immigration enforcement: if people believe filing taxes will get them arrested, they'll stop filing.

The IRS collects taxes from everyone who earns money in the United States, regardless of immigration status. That's been the deal for decades. Millions of undocumented immigrants pay billions in taxes annually, often with Individual Taxpayer Identification Numbers (ITINs) specifically designed for people who can't get Social Security numbers.

The plaintiff organizations in the Massachusetts case said they "cannot encourage the filing of tax returns that may result in ICE arresting" household members. Judge Talwani found this "chilling effect" on tax compliance constituted irreparable harm.^[2]

Lisa Gilbert of Public Citizen put it simply: "If federal agents use this private information...it can endanger lives."^[5]

What Happens Next

The DC Circuit ruling doesn't end the underlying lawsuit. It just lets the data sharing continue while litigation proceeds. The Massachusetts injunction remains in effect in that jurisdiction.

When federal appeals courts disagree on the same law, the Supreme Court typically steps in. Given the stakes (tax privacy, immigration enforcement, administrative law) this case has all the ingredients for a cert petition.

Until then, the program operates in legal purgatory. The administration can share data with ICE in circuits that haven't blocked it. But the constitutional questions remain unanswered.

What You Can Do

Still File Your Taxes

Not filing creates its own legal problems. The Massachusetts injunction is still in effect. Consult an immigration attorney if you have specific concerns about your situation.

Get an IRS Identity Protection PIN

An IP PIN prevents anyone from filing taxes using your information without it. Free at irs.gov.

Document Everything

If ICE agents reference your tax data during an encounter, that information's source is legally contested. Note the date, time, and exactly what was said.

Watch the Courts

This case is moving fast. The Center for Democracy & Technology and Public Citizen are tracking the litigation.

References

Published: February 26, 2026