The IRS Gave ICE Some Information That It Really Shouldn’t Have. What Now?

Jurisprudence There’s a cost to hurting the trust you have with undocumented workers—after all, they pay $90 billion in taxes annually. By Enter your email to receive alerts for this author. Sign in or create an account to better manage your email preferences. Unsubscribe from email alerts Are you sure you want to unsubscribe from email alerts for Shirin Ali? Sept 10, 20265:45 AM Photo illustration by Slate. Photos by Michael M. Santiago/Getty Images and Unsplash. This is Executive Dysfunction, a newsletter that highlights one under-the-radar story about how Trump is changing the law—or how the law is pushing back—and keeps you posted on the latest from Slate’s Jurisprudence team. Click here to receive it in your inbox each week. The IRS arguably holds Americans’ most sensitive information, more so than any other federal agency, and for the better part of 2025, it quietly handed over that information, to the tune of about 47,000 records, to the Department of Homeland Security. This was done to aid in President Donald Trump’s deportation agenda, but that doesn’t mean it was legal: An appeals court this week found that the IRS violated federal law when it turned over the addresses of folks it deemed to lack permanent legal status. Now the agency and the employees who participated in the illicit information sharing could face civil and criminal consequences, including lawsuits from people who were deported after the IRS delivered their information to DHS. The IRS is just one agency that got roped into cooperating with the Trump administration amid its immigration crackdown last year. Under normal circumstances, the IRS is forbidden from disclosing Americans’ tax information to anyone, including to other federal agencies and even within the executive branch, something Congress codified into federal law in the aftermath of Watergate. However, there are a few narrow exceptions, including active non-tax-related criminal investigations. This is where Trump’s DHS began scheming, crafting a memorandum of understanding that took advantage of a loophole in a federal statute. The memorandum stated that the IRS could provide undocumented taxpayers’ addresses because a person is technically subject to criminal investigation if they remain in the U.S. beyond 90 days after receiving a final order of removal. The MOU was so controversial it drove former Acting IRS Commissioner Melanie Krause, whom Trump appointed in early 2025, to resign in protest last April, alongside other top IRS leadership. Nevertheless, (now) former Immigration and Customs Enforcement Director Todd Lyons wasted no time after the IRS deal was struck, requesting the last known addresses of 1.28 million undocumented individuals late that June. By July 1, the IRS was giving its employees the green light to process Lyons’ requests. However, according to the U.S. Court of Appeals for the District of Columbia Circuit, per federal law, that blanket request shouldn’t have been honored. Instead, ICE should have provided the IRS with specific information about its criminal investigations before the IRS shared any of its records, including the addresses DHS had on file for the specified individuals; however, that did not happen for more than 90 percent of DHS’s records requests. As the appeals court concluded, the IRS “never confirmed whether ICE request contained information plausibly reflecting ‘the name and address of the taxpayer.’ ” In fact, the judges suggested, ICE could have submitted requests with addresses like “ ‘Don’t Care 12345,’ or ‘00000,’ and still received a taxpayer’s address.” That’s not all. If it had followed the law, ICE would have identified a point of contact at the agency for each taxpayer’s criminal investigation. Instead, the court found, Lyons was listed for all 1.28 million records requests—which is “facially impossible,” the judges wrote. The agency also failed to provide a reason why a taxpayer’s address would be relevant to its investigation. The bottom line is that the IRS dramatically moved away from its long-standing policy of closely guarding taxpayers’ sensitive information and reviewing records requests on a case-by-case basis to “a mass, automated review of millions of records at the press of a button.” What happens now? For its actions, the government could “face steep civil and criminal consequences for willful disclosure of information,” in violation of federal tax law—but it’s largely up to Congress to decide if and how to exact those consequences. The House Ways and Means Committee or the Senate Finance Committee could hold oversight hearings to dig into what occurred here and chose to penalize the IRS by pulling its funding or imposing guardrails on its work. The appetite to do so likely depends largely on whether Democrats retake the House in the upcoming midterms. Even more significantly, everyone who was swept up in DHS’s probe of addresses and was deported or subjected to ICE because the IRS handed over their tax records now has standing to sue. It’s not clear how many individuals were deported directly from the two agencies’ MOU, but we do know that arrests and deportations across the country have skyrocketed. However, those who were directly affected and are no longer on U.S. soil likely face an uphill battle to pursue legal action against the Trump administration. There’s another way this could all come back to bite the IRS. The agency has for decades carefully built up trust within America’s immigrant population by pushing them to file their taxes, no matter their status, and promising that this will not trigger deportation. With a new tax season beginning on Jan. 1, “some people will be wary of filing their tax returns,” Martin Sheil, a former IRS investigator and supervisory special agent for the agency’s Criminal Investigation Division, told me. “From an IRS perspective, it is their mission to ensure and promote voluntary compliance with the Internal Revenue Code.” The whole situation underscores the IRS’s politically fraught mission, which for decades, Sheil said, heavily discouraged its employees from making any illegal disclosures—even inadvertent ones—because people need to feel confident that their tax records are being protected. “Then you get into a wrestling match between agencies and mission priorities,” Sheil said. “ICE feels like their No. 1 one priority, laid out by the president, is to scoop up illegal immigrants, and they want to use any means necessary to assist them in meeting their mission priority.” But all federal agencies are at risk if Americans suddenly stop complying with the IRS—a trend that should majorly worry Congress. Maintaining the confidence of taxpayers is integral to keeping the federal government’s lights on, particularly when you consider that undocumented workers pay an estimated $90 billion in federal, state, and local taxes, despite being ineligible for most social programs, including Social Security and Medicare. Even a 1-percentage-point loss among the overall U.S. population would slash federal revenue by $40 billion. Over the past year, everyone in the U.S., regardless of legal status, has personally witnessed or read about ICE’s heavy-handed tactics across the country and is now learning about the unlawful relationship the IRS struck up with DHS. That could cumulatively inhibit people from complying with tax law, and this ought to alarm Congress, the body that has not just the authority to step in and investigate how the IRS and DHS have been working together, but an obligation to do so. We hope you learned a thing or two from this edition of Executive Dysfunction. If you enjoyed reading it, please consider supporting our legal journalism by becoming a Slate Plus member! Elsewhere in Jurisprudence In this week’s Amicus, Dahlia Lithwick digs into the Supreme Court’s decision on Trump’s White House ballroom, as well as the latest legal developments in his attempt to thwart mail voting ahead of the midterms, in conversation with Erwin Chemerinsky, dean of the Berkeley School of Law. The episode also delves into how the court’s conservative majority uses doctrinal head-fakes to ensure that the president always wins in court.In the Amicus bonus episode, Madiba K. Dennie, of Balls and Strikes, joins Dahlia to unpack the justices’ attempts to prevent their papers from going public and analyzes the broader message that sends about SCOTUS.House GOP Leader Mike Johnson failed to pass an amendment that would cap the number of Supreme Court justices at nine. Friend of Slate Alexis Romero, an economic and environmental justice attorney, argues that this cynical move demonstrates that “Republicans are so scared of the electorate voting for judicial reform” that they are willing to try to sign away their own authority on the matter.Trump’s executive order commanding the U.S. Postal Service to suppress mail voting is not actually the first time the federal government has attempted to control what gets mailed to Americans. Friend of Slate Steven Lubet, the Williams Memorial Professor Emeritus at Northwestern University Pritzker School of Law, explains how USPS was similarly weaponized after a postmaster refused to mail pamphlets highlighting the human-rights abuses perpetuated by slavery.The trial of Lindsay Clancy, the high-profile murder case that consumed the nation for weeks, ended in a mistrial last Friday. The jury was held up by a single juror, who refused to join his 11 fellow jurors in finding Clancy not guilty. I spoke with a trial attorney to understand how common a hung jury really is, why the judge in this case decided not to throw out the one unruly juror, and what the prosecution should do next.Trump has continuously violated the rights and interests of individual states for his personal and partisan political interests, an impeachable offense, argues friend of Slate Frank Bowman, a law professor and a former federal and state prosecutor. The president has specifically gone after blue states, following an unprecedented pattern that amounts to “an abuse of presidential power sufficiently egregious and disruptive of constitutional order to merit impeachment,” Bowman writes. Thank you for reading Executive Dysfunction! We’re thrilled to be in your feeds and will be back with more dysfunction analysis next week. Donald Trump Immigration Law Taxes ICE Executive Dysfunction