Court upholds block on IRS sharing taxpayer data with immigration authorities

Key facts

• A U.S. appeals court upheld an injunction against an IRS policy.
• The policy allowed the IRS to share taxpayer addresses with U.S. Immigration and Customs Enforcement (ICE).
• The court found the Trump administration's practice violated federal law.
• The IRS had already shared 47,289 taxpayer records with ICE.
• The IRS procedure allowed ICE to request addresses using non-ZIP code numbers.
• The court cited post-Watergate privacy laws designed to prevent abuses of taxpayer information.

A U.S. appeals court on Tuesday upheld an injunction against an Internal Revenue Service policy that permitted the sharing of taxpayer addresses with immigration authorities, ruling that the practice implemented under the Trump administration violated federal law.

The U.S. Court of Appeals for the District of Columbia Circuit determined that the IRS had disclosed approximately 47,000 taxpayer addresses to U.S. Immigration and Customs Enforcement (ICE) as part of an effort to enhance immigration enforcement. The IRS had adopted a procedure allowing ICE to obtain taxpayer addresses by providing a five- or nine-digit number in an address field, even if it was not a valid ZIP code.

Legal groups, including the Center for Taxpayer Rights, had sued, arguing the policy was unlawful. A lower court judge had previously agreed and blocked the policy, by which point the IRS had already shared 47,289 records. The Trump administration had contended on appeal that the ruling impeded federal law enforcement efforts.

In the ruling, U.S. Circuit Judge Cornelia Pillard stated that the IRS's procedures violated federal law in multiple ways, most significantly by not requiring ICE to provide an actual taxpayer address as legally mandated. Pillard noted that the process automated the review of millions of records without individual oversight to ensure compliance with legal prerequisites for releasing taxpayer information. Skye Perryman, representing the plaintiffs, expressed satisfaction that the court acted to halt this unlawful behavior, emphasizing the importance of post-Watergate privacy laws.