IRS-ICE Tax Data Deal Risks $9.5 Billion Annual Revenue, Spurs Lawsuit and IRS Director Resignation

10 posts • GPT (4.1)

Updated Apr 15, 2025, 08:02 PM

The Internal Revenue Service (IRS) has entered into an agreement with U.S. Immigration and Customs Enforcement (ICE) to share certain taxpayer information, specifically targeting undocumented immigrants who have final deportation orders or are under criminal investigation. The agreement, signed by Secretary of the Treasury Scott Bessent, has prompted the resignation of IRS director Melanie Krause and sparked legal challenges, including a lawsuit by Centro de Trabajadores Unidos. Estimates from the Institute on Taxation and Economic Policy indicate that undocumented immigrants paid $96.7 billion in federal, state, and local taxes in 2022. In Oklahoma alone, 90,000 undocumented residents paid taxes that year. There are over 5.8 million active Individual Taxpayer Identification Numbers (ITINs) used by those ineligible for Social Security numbers. A 10% drop in tax filings by undocumented immigrants could result in a $9.5 billion annual decrease in tax revenue, with $8.6 billion lost to federal funds and $900 million to state and local governments. The Budget Lab projects that the federal government could lose up to $300 billion in revenue over the next decade if compliance declines. The agreement has raised concerns among advocacy groups and legal experts about potential violations of taxpayer privacy protections and the erosion of trust in the tax system. A federal judge, Dabney Friedrich, is scheduled to review arguments on whether to block or allow the agreement to proceed. Community organizations, such as the Mexican Consulate in Oklahoma City, are working to combat misinformation and encourage undocumented residents to continue filing taxes. They emphasize that the data-sharing agreement is intended to apply only to those with final deportation orders or under criminal investigation. However, reports indicate that fear and mistrust have already affected tax filing behavior in some communities.

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#Internal Revenue Service #IRS #ICE #Scott Bessent #Melanie Krause #Centro de Trabajadores Unidos #Oklahoma #Individual Taxpayer Identification Numbers #Social Security numbers #Budget Lab #Dabney Friedrich #Mexican Consulate #Oklahoma City

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Sources

univision.com(2)bitlyanews.com nbcwashington.com cnn.com

AlbertoRodNews

@AlbertoRodNews

Filing taxes in the US is a ticket to deportation, undocumented immigrants fear https://t.co/uEia0E67JF

NBC4 Washington

@nbcwashington

10% fewer undocumented immigrants filing their taxes would mean a decrease of $9.5 billion a year in tax revenue, a tax policy organization found. https://t.co/f6nGXvCiz0

Internet Ethics

@IEthics

"Losses could be more – and not just with undocumented population – as this action, along with many others, make people more nervous about sharing data with the IRS and skeptical of the tax system writ large": https://t.co/Da5D5nulNF #ethics #law #data #privacy #gov