A federal judge should deny a motion to block the IRS from providing outside agencies with identifying tax information about individuals targeted for immigration enforcement, the government said, arguing its arrangement with the Department of Homeland Security is in line with statutory privacy protections.
On August 28, the government filed an opposition to a motion by the Center for Taxpayer Rights and several labor unions, which are seeking to halt the IRS’ cooperation with the Immigration and Customs Enforcement (ICE) under a Memorandum of Understanding (MOU) signed in April.
The MOU permits ICE to request data about persons of interest and obtain information normally shielded from disclosure outside the IRS under IRC § 6103.
The case, Center for Taxpayer Rights v. IRS (No. 1:25-cv-00457-CKK), concerns the legality of the MOU. Plaintiff organizations assert that ICE’s requests are not for bona fide criminal investigations as excepted under Section 6103, but for civil immigration enforcement.
They claim that the policy is arbitrary and capricious under the Administrative Procedure Act (APA), does not adequately consider taxpayer privacy interests, and is causing harm by potentially deterring individuals from filing tax returns or claiming benefits.
In its opposition, the government argues that the plaintiffs lack standing because their alleged injuries are speculative and not concrete. The government states that neither the MOU nor the IRS’ information sharing constitutes a final agency action reviewable under the APA.
Contending the organizations’ framing of the MOU as a “Data Policy,” the government told Judge Colleen Kollar-Kotelly “there is no such policy.” Their claim falls short on the merits because the plaintiffs cannot “pursue an APA claim that the IRS’s provision of information violates the Internal Revenue Code given the comprehensive remedial scheme Congress established for violations of 26 U.S.C. § 6103,” according to the filing.
The opposition further asserts that IRC § 6103(i)(2) requires the IRS to provide address information to law enforcement agencies when statutory prerequisites are met, and that the MOU includes safeguards such as requiring ICE to specify the taxpayer’s name and address, the relevant tax period, the applicable non-tax federal criminal statute, and the reason the information is relevant.
But the plaintiff organizations in their motion criticized the IRS’ compliance with an ICE request for the addresses of 1.28 million individuals, though the government claims it only gave 3.7% of this.
This was “either because ICE did not provide all information required under the terms of the MOU (and therefore did not satisfy the requirements of Section 6103(i)(2)), or because the IRS was unable to match the individual to a known taxpayer,” the government said. “Moreover, since receiving the June 27 request, the IRS has not received any further request from ICE pursuant to the MOU.”
The opposition maintains that the government is entitled to a presumption of regularity in following statutory and contractual requirements. Regarding the issue of harm, the government argues that the provision of information to law enforcement in accordance with statutory obligations does not constitute irreparable harm.
It also notes that the MOU has been in effect for over four months and describes the current arrangement as the “status quo,” suggesting that an injunction would “disrupt” ongoing law enforcement cooperation. Blocking the MOU would run particularly run afoul of Section 6103(i)(2) requirements – the purpose of which “is to aid in the efficient conduct of law enforcement investigations and proceedings.”
This could “be impeded or delayed by an injunction,” the government said.
For more information on exceptions to tax return and return information disclosure restrictions, see Checkpoint’s Federal Tax Coordinator 2d ¶ S-6300.
Take your tax and accounting research to the next level with Checkpoint Edge and CoCounsel. Get instant access to AI-assisted research, expert-approved answers, and cutting-edge tools like Advisory Maps and State Charts. Try it today and transform the way you work! Subscribe now and discover a smarter way to find answers.
