The federal government has asked a federal appeals court to lift an order blocking it from using confidential taxpayer addresses for immigration enforcement, arguing the disclosure policy is authorized by law and that the challengers lack standing to sue. (Community Economic Development Center of Southeastern Massachusetts v. Bessent, No. 26-1329, reply brief filed 8/17/2026)
In a reply brief to the 1st U.S. Circuit Court of Appeals, the Department of Justice urged the court to vacate a February order that barred U.S. Immigration and Customs Enforcement (ICE) from using taxpayer data obtained from the IRS under an April 2025 Memorandum of Understanding (MOU). The government contends the arrangement is lawful and that the suit, brought by a coalition of community organizations, rests on speculative injuries and a flawed reading of the Tax Code.
Government challenges plaintiffs’ standing
The government’s threshold argument is that the organizations lack standing to sue. It contends the lead plaintiff, the Community Economic Development Center of Southeastern Massachusetts (CEDC), has not shown a direct injury, calling its claim of lost revenue from fewer tax filings unproven and any effect on its tax-assistance services are indirect.
It also argues plaintiffs identify no concrete harm from the disclosures themselves, noting they concede federal law already requires noncitizens to give the Department of Homeland Security their current address.
The government further argues that the coalition lacks associational standing because its members face no imminent harm. It says the MOU covers only individuals already “under final orders to remove them from the United States,” so members without such orders are not at risk. The brief calls the plaintiffs’ fears of misidentification “speculative theories” that “presume the agencies will commit errors in carrying out their official duties.”
Government defends data sharing as lawful
On the merits, the brief contends the disclosures are authorized by IRC § 6103. It notes that § 6103(i)(2) directs the IRS to disclose “return information (other than taxpayer return information)” to officers “personally and directly engaged in” nontax criminal investigations upon a valid request. Central to the argument is a statutory carve-out: Congress excluded “a taxpayer’s identity” — which the statute defines to include a name and “mailing address” — from the protected category of “taxpayer return information.”
Because the statute says the IRS “shall disclose” the information once a valid request is received, the government argues, sharing addresses with ICE is mandatory and requires no court order. The brief also contends plaintiffs have not identified a reviewable final agency action, describing the MOU as a document that “merely clarifies IRS’s existing duties under a statute.”
It leans on a February 2026 decision by the District of Columbia U.S. Circuit Court of Appeals in Centro de Trabajadores Unidos v. Bessent, 167 F.4th 1218, which found the same policy likely lawful on its face and not reviewable under the Administrative Procedure Act. “This Court must create a circuit split to hold otherwise,” the brief states.
The lawsuit and the district court’s injunction
The lawsuit was brought by four community organizations that provide tax, legal, and related services to immigrant communities. In their complaint, the groups argued that the data-sharing arrangement violates the confidentiality protections of the Tax Reform Act of 1976 and reverses decades of IRS assurances that taxpayer information would not be used for immigration enforcement, chilling tax compliance among immigrant taxpayers.
On February 5, 2026, Judge Indira Talwani of the U.S. District Court for the District of Massachusetts granted a preliminary injunction, finding the plaintiffs likely to succeed on their APA claims. The court ruled that the IRS’ policy change was arbitrary and capricious and that ICE’s handling of roughly 47,000 disclosed addresses violated § 6103, and it found that ICE was not “organizationally capable” of separating data used for criminal investigations from potential civil enforcement.
The government acknowledges an error in processing the August 2025 disclosure for fewer than 5% of the 47,289 individuals whose addresses were shared, but casts it as a misapplication being remediated rather than proof the policy is unlawful.
Amici warn of expanded civil fines
A group of immigrant-rights and civil rights organizations and legal service providers filed an amicus brief urging the court to uphold the injunction. The signers include The Legal Aid Society, the NYU School of Law Immigrant Rights Clinic, Public Justice, the Asian American Legal Defense and Education Fund, and five other groups.
They argue that the Department of Homeland Security intends to misuse taxpayer data to expand its program of civil immigration fines, contending the agency has already assessed more than $84 billion in penalties against over 100,000 noncitizens, often without individualized findings of willfulness.
Lifting the injunction, they warn, would expose noncitizens to predatory debt collection, ruined credit, wage garnishments, seized tax refunds, and pressure to self-deport that separates families.
“Behind every one of the 47,000 pieces of data at issue in this case is a noncitizen who stands to lose their livelihood under the weight of crushing debt,” the amici wrote.
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