An organization led by the previous National Taxpayer Advocate and other groups are seeking either a stay or preliminary injunction against an agreement between the IRS and Immigration and Customs Enforcement (ICE), telling a federal judge that the Trump administration cannot misuse protected taxpayer information for its “mass deportation” plans.
Data Sharing
The Center for Taxpayer Rights, headed by former National Taxpayer Advocate Nina Olson, and a group of labor unions filed a motion and supporting arguments in the U.S. District Court for the District of Columbia August 20 asking Judge Colleen Kollar-Kotelly to block the “Data Policy” enabling the IRS – and the Department of Government Efficiency – to supply tax records protected under IRC § 6103 to immigration enforcement officials.
Formally signed by the IRS and the Department of Homeland Security in April, the agreement targets those the administration suspects of residing in the U.S. illegally. According to the Center and accompanying organizations, the policy is “unlawful” and “already causing irreparable harm.” Reuters previously reported several high-ranking IRS veterans left the agency in opposition to the new policy.
They claimed that as of this month, the IRS has “shared tens of thousands of taxpayers’ data within days receiving a request” from ICE for addresses of more than 1 million individuals. The government has asserted in its filings that a narrow exception of Section 6103 permits the IRS to cooperate, but the plaintiffs assert this only applies to “specific criminal investigations and proceedings,” not the “bulk disclosure of sensitive information.”
ICE in its request did not comply with taxpayer confidentiality laws, the groups said Wednesday. “It is entirely implausible that ICE is conducting bona fide criminal investigations of over 1 million people or that it seeks home addresses for use in preparation for judicial or administrative proceedings or investigation that may lead to such proceedings, as the law requires.”
But the Trump administration promised to “carry out the mass deportation of criminal illegal aliens,” which is a civil enforcement matter and not legal basis for such a request, the filing continued. “Nonetheless, the IRS disregarded its statutory obligations” and obliged in providing the same amount of taxpayer data “in just one week” as it had to every federal law enforcement agency in a year, the groups claimed.
They contend the policy is arbitrary and capricious under the Administrative Procedure Act, or APA. The IRS also failed to provide a reasoned explanation for the abrupt change, did not consider the impact on taxpayer privacy or voluntary compliance, and ignored significant reliance interests, per the motion’s supporting memo.
Once confidential information is disclosed, it argued, the injury cannot be undone and is not compensable by money damages. The relief sought is a court order to stop further disclosures and require the return or destruction of any data already shared with ICE.
Prior Filings
The Center and company first filed its suit against the government in February, at the time basing its complaint around the involvement of DOGE associates with the IRS and skepticism over what DOGE’s proximity to taxpayer data meant as far as the potential violations of privacy protections.
As the data sharing policy came to fruition in the ensuing two months, the plaintiffs redirected their case towards the legality of the agreement. The government motioned to dismiss the case, which has been pending since.
On August 15, the government filed a reply in support of its motion to dismiss. It argued that the plaintiffs lack Article III standing because they have not alleged a concrete, non-speculative injury. The government contended the risk of future harm from data sharing is too remote. It noted that only one data sharing agreement has been entered into, making it speculative whether any of the plaintiffs’ data will be shared or whether such sharing would be unlawful.
The reply also asserted that the alleged conduct does not amount to the kind of targeted, offensive intrusion required for common law privacy torts. Further, the APA does not provide a remedy for alleged violations of the Tax Code or the Privacy Act, as those statutes already contain “comprehensive remedial schemes.”
For more on rules restricting the disclosure of tax returns and related information, see Checkpoint’s Federal Tax Coordinator 2d ¶ S-6200.
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