US court strikes down IRS-ICE taxpayer data sharing under Trump

A US federal appeals court has upheld a block on a Trump-era policy that allowed the Internal Revenue Service (IRS) to share taxpayer information with immigration authorities, ruling the practice violated federal privacy law.

The three-judge panel of the US Court of Appeals for the District of Columbia Circuit found that the IRS disclosed roughly 47,000 taxpayer addresses to US Immigration and Customs Enforcement (ICE) in 2025. The disclosures were made under an agreement between the IRS and the Department of Homeland Security, which oversees ICE.

Under that agreement, the IRS began processing ICE requests for the last known addresses of up to 1.28 million people suspected of residing unlawfully in the US. The IRS adopted a procedure that allowed ICE to obtain taxpayer information if it provided a five- or nine-digit number in an address field, even when that number was not a valid ZIP code.

Civil society groups, including the Center for Taxpayer Rights and the Main Street Alliance, challenged the practice in court. A lower court had already blocked the policy, but by then the IRS had shared 47,289 records.

The Trump administration argued on appeal that the ruling hindered federal law enforcement. However, Judge Cornelia Pillard, writing for the panel, said that was a matter for Congress, not the courts. She noted the procedures violated federal law in several ways, most notably by not requiring ICE to provide an actual address for a taxpayer as legally required.

Pillard also said the practice "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."

The ruling draws on protections enacted after the Watergate scandal, when Congress barred the IRS from sharing taxpayer information with other agencies unless stringent conditions were met. Skye Perryman of Democracy Forward, which represented the plaintiffs, welcomed the decision, saying the post-Watergate privacy laws exist to prevent such abuses of power.