ICE-IRS Deal Blasted as 'Bad Policy. Bad Economics. And Cruel.'

Migrant and privacy rights advocates this week are sounding the alarm over a deal signed by Treasury Secretary Scott Bessent and Homeland Security Secretary Kristi Noem to hand sensitive taxpayer data over to immigration authorities as part of U.S. President Donald Trump's mass deportation effort.

The Internal Revenue Service (IRS) and the Immigration and Customs Enforcement (ICE) have entered into a memorandum of understanding (MOU) "to establish a clear and secure process to support law enforcement's efforts to combat illegal immigration," a Treasury Department spokesperson toldFox News, which reported on the development after a late Monday court filing.

"The bases for this MOU are founded in long-standing authorities granted by Congress, which serve to protect the privacy of law-abiding Americans while streamlining the ability to pursue criminals," the spokesperson said. "After four years of [former President] Joe Biden flooding the nation with illegal aliens, President Trump's highest priority is to ensure the safety of the American people."

After weeks of warnings about a potential data transfer deal, it was revealed as part of a legal case brought by Centro de Trabajadores Unidos, Immigrant Solidarity DuPage, Inclusive Action for the City, and Somos Un Pueblo Unido, which are represented by Alan Morrison, Public Citizen Litigation Group, and Raise the Floor Alliance.

"Taxpayer privacy is a cornerstone of the U.S. tax system," Public Citizen co-president Lisa Gilbert said in a Tuesday statement. "This move by the IRS is an unprecedented breach of taxpayer privacy laws and confidentiality, which has been respected by both political parties for decades."

"The Trump administration's terror tactic of using immigrants' tax data against them will drive some of our most vulnerable communities further underground," she warned. "If this taxpayer information isn't safe from the prying eyes of the Trump administration's goons, then no one's taxpayer information is safe."

Juliette Kayyem, a former Department of Homeland Security official now lecturing at the Harvard Kennedy School, wrote on social media: "Bad policy. Bad economics. And cruel. They are so desperate to get their deportation numbers up that they are doing this."

Multiple members of Congress also blasted the move. Rep. Jimmy Gomez (D-Calif.) said that "the IRS should NEVER be weaponized to target immigrant families. This backdoor deal with ICE shatters decades of trust—and may be illegal."

"I will fight this with everything I've got," vowed Gomez, a member of the House Ways and Means Committee. "No one should fear that filing taxes puts their family at risk."

Congressman Joaquin Castro (D-Texas) was among the critics who emphasized that the MOU doesn't just affect migrants.

"First things first: The impact of folks not filing their taxes because they are afraid of deportation would be detrimental to our economy," he explained. "Two: Immigrants pay taxes but do not benefit from the social programs that most taxpayers do. Three: Everyone should be concerned about the privacy implications here. This sets the precedent that the federal government can arbitrarily share your personal information with law enforcement. And it's just wrong."

Rep. Juan Vargas (D-Calif.) similarly said: "For decades, undocumented immigrants have trusted the IRS when it encouraged them to file. They've paid taxes in good faith, contributing nearly $100 BILLION per year and supporting social services they can't even access. Not only is this a total betrayal, but it's also illegal. We'll fight this."

The Institute on Taxation and Economic Policy also highlighted that "turning the IRS away from its job (collecting taxes) to instead focus on mass deportation efforts will mean less tax revenue collected on top of the harm done to families and communities affected by deportations."

In response to The New York Times' reporting on the deal, American Immigration Council senior fellow Aaron Reichlin-Melnick pointed out on social media that the MOU "is, on its face, limited to criminal investigations (not deportation investigations)."

"There are many questions raised about this new [agreement], which seems to violate previous understandings of the laws requiring IRS not to share taxpayer information," he continued. "But at its heart it does not seem that the MOU permits ICE to ask for taxpayer data for deportation reasons."

"It seems primarily to be aimed at criminal investigations for willful failure to depart after the issuance of a removal order, a crime on the books which (until now) is virtually never prosecuted," Reichlin-Melnick added. "Despite the fact that this MOU is limited only to criminal law enforcement, it will likely have a chilling effect on undocumented taxpayers."

How the Trump administration actually proceeds remains to be seen. The court filing says no information has been shared between the agenices yet—but the deal comes as part of a wave of anti-immigrant policies and rhetoric from the president and his officials.

"With the Supreme Court greenlighting Trump's use of the Alien Enemies Act and the administration now gaining access to sensitive IRS data, we continue to slip into a new era of authoritarianism in America," Beatriz Lopez, co-executive director of the Immigration Hub, said a Tuesday statement "The digital and physical dragnets that Trump is building mean millions of immigrants—many of whom have followed the law and paid their taxes for decades—are now vulnerable to indiscriminate brutality and quiet erasure with little opportunity for redress."

Lopez stressed that "undocumented immigrants already contribute billions to our economy—often paying a higher effective tax rate than 55 major corporations and some of the wealthiest individuals in America. By weaponizing private taxpayer data, the administration is shattering what little trust remains between immigrant communities and the government and putting critical revenue streams at risk."

"Coupled with Trump's xenophobic tariff threats and a $350 billion demand to fund mass disappearances and deportations, this is more than an attack on immigrants—it's a calculated effort to destabilize the country and remake its image," she concluded. "Congress must reject this funding and the authoritarian playbook behind it. This is not policy. It's punishment."