Several months into the Trump administration, the IRS and ICE brokered a deal that would give the latter access to certain data.
The information would then be used to help ICE locate and apprehend illegal immigrants.
Yet again, a judge is blocking the Trump administration from using this data, and yet again, it is a Democrat-appointed member of the bench who issued the order.
In July 2025, the IRS and ICE signed a Memorandum of Understanding (MOU) for a data-sharing operation between the two agencies.
Names, addresses, and tax data were to be given to ICE for immigration-related criminal enforcement.
This was a major policy shift on the part of the IRS, which had always acted independently on this front, keeping taxpayer information confidential from other government agencies.
There was a host of legal challenges presented when the MOU was signed, with Democrats and advocacy groups making it clear that it would be aggressively challenged in court.
After the MOU was announced, several high-ranking IRS officials balked and wound up resigning rather than complying with the order. The departures underscored how contentious the agreement had become inside the IRS.
Among those resigning their positions was Melania Krause, who had just been installed as the acting head of the IRS.
Kathleen Walters, the chief privacy officer, also resigned her position.
The fearmongering over the MOU ran rampant. For example, Audrey Casillas, who assisted low-income residents in Los Angeles with their tax returns, stated, “The fear is real. There a lot of no shows. Clients are asking us: ‘Is ICE going to be there when we do our taxes?’”
For now, everything has been put on hold after United States District Judge Colleen Kollar-Kotelly, a Bill Clinton appointee, blocked the MOU.
She ruled, “Plaintiffs have shown a substantial likelihood that both the IRS’s implementation of the Address-Sharing Policy and its subsequent sharing of taxpayer information with ICE were unlawful under the [Administrative Procedure Act (APA)].”
She further stated, Furthermore, Plaintiffs have shown that the IRS’s disclosure of confidential taxpayer address information to ICE was contrary to law because it violated several provisions of Internal Revenue Code Section 6103(i)(2). For similar reasons, Plaintiffs have plausibly alleged that the IRS’s broader Data Policy is unlawful under the APA.”
The Trump administration is expected to appeal the ruling. Until that appeal is heard, however, officials must halt all use of the information it has obtained via the IRS, something that will likely hinder DHS Secretary Kristi Noem in her efforts to remove all illegals who entered the country during the Biden administration.
