The U.S. Court of Appeals for the D.C. Circuit issued a binding ruling Tuesday that the IRS violated federal taxpayer privacy law when it shared confidential information with U.S. Immigration and Customs Enforcement (ICE) for deportation investigations. The three-judge panel upheld an earlier district court injunction blocking further sharing under the IRS-ICE data-sharing agreement.
What changed
A federal appeals court upheld a lower court ruling blocking information sharing between the IRS and ICE after the immigration agency requested the last known address of millions of people. The three-judge panel found ICE’s sweeping request for addresses of 1.28 million people who may be unlawfully present in the U.S. violated laws established in the wake of the Watergate scandal that bars the IRS from sharing information with other agencies unless it meets “stringent conditions.”
“The IRS failed to require ICE to provide a ‘specific reason’ why the requested return information ‘is or may be relevant to [a qualifying] proceeding or investigation,’ as the statute demands,” Judge Cornelia Pillard wrote for the panel. “It entirely fails to ensure that ICE lists a federal employee, let alone one ‘personally and directly engaged’ in a qualifying investigation of a particular taxpayer. When ICE requested information on 1.28 million taxpayers in the summer of 2025, ICE identified the same person as the point of contact for every single request.”
In more than 90% of the cases, the IRS merely matched taxpayer identification numbers and didn’t bother to verify the name and address.
Why it matters
This appeals court decision is binding precedent on all federal agencies, USCIS, and the courts within the D.C. Circuit’s jurisdiction. The ruling means:
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The three-judge panel upheld a district court injunction halting the sharing, agreeing that it trampled on Section 6103 of the Internal Revenue Code, which limits when and how the IRS can disclose the data it collects on taxpayers.
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Tax practitioners can advise immigrant clients that their IRS records are protected from routine ICE requests absent a specific criminal investigation into that individual taxpayer with a named investigator personally engaged in that specific case.
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The government and its personnel face steep civil and criminal consequences for willful disclosure of information in violation of section 6103.
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The IRS cannot use batch-matching or TIN-matching procedures to supply addresses to ICE without ICE first providing the complete identifying information (full name and address) for each individual subject of inquiry.
Way forward
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Verify your clients’ tax privacy status. If you represent an immigrant client, you can rely on this ruling to argue that their IRS information—including ITIN records—remains confidential unless there is a genuine, documented criminal investigation into that specific client with a named ICE officer directly engaged.
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Flag any past disclosures. If your client was affected by IRS disclosures to ICE prior to the preliminary injunction (November 2025), document this. You may have grounds to seek damages or challenge any resulting immigration action based on unlawfully obtained information.
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Monitor ongoing litigation. This is not final agency policy. The Trump administration may appeal or seek to overturn the ruling legislatively. Check Center for Taxpayer Rights v. IRS for case updates.
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Educate immigrant clients about tax compliance. Reassure eligible clients that filing taxes will not result in automatic disclosure to immigration authorities, thus encouraging compliance with Section 1040 and ITIN filing obligations.
Disclaimer
This article is not legal advice. Fola is not a law firm. You should consult a licensed immigration attorney or tax professional licensed to practice in your jurisdiction before relying on this information. The policy landscape can change without notice; always verify the current status of this ruling and any appeal by reviewing the court docket and consulting with an attorney. The sourceUrl above links to the original court coverage; see that source for the full context and any filing updates.