The Internal Revenue Service (IRS) is quietly building a new system that would grant Immigration and Customs Enforcement (ICE) automatic access to taxpayer addresses, a move that privacy advocates and even IRS insiders warn could undermine long-standing legal protections for confidential tax data.
According to documents obtained by ProPublica, the system would allow ICE to upload bulk lists of individuals it wants to locate for deportation. The IRS system would then match those names with the agency’s tax records and return the most recent addresses tied to each taxpayer. Until now, such access was tightly restricted and handled on a case-by-case basis under federal law.
The development marks a sharp departure from standard practice at the IRS, which has historically maintained a firm wall between tax data and immigration enforcement. Critics warn that the automated system lacks proper legal oversight and could lead to wrongful targeting, outdated information use, and even misuse of data beyond immigration purposes.
Legal Pushback Leads to IRS Counsel’s Removal
Tensions inside the IRS over the plan reached a boiling point in June. Acting IRS General Counsel Andrew De Mello reportedly refused to comply with ICE’s sweeping request for addresses tied to more than 7 million taxpayers. He flagged legal concerns, arguing that ICE had not demonstrated the requests met the criteria spelled out in the existing memorandum of understanding (MOU) between the IRS and the Department of Homeland Security (DHS), which oversees ICE.
Just two days after rejecting the request, De Mello was forced out of his role. Though the requested data still hasn’t been handed over, his departure sent shockwaves through the agency. IRS staff familiar with the matter saw it as a clear signal of mounting pressure to bend longstanding rules.
Trump-Era Pressure Sparks System Design
The roots of the IRS-ICE collaboration trace back to the Trump administration, when officials began pushing the IRS to provide more direct support for immigration enforcement. That push intensified as President Trump campaigned on mass deportations and sought ways to expedite the removal of undocumented immigrants.
To align with that agenda, DHS and the IRS signed an MOU that technically allowed for some data-sharing — but under strict conditions, including the need for active criminal investigations. De Mello and others within the IRS maintained that the mass request from ICE failed to meet those standards.
One former IRS advisor noted that it was unprecedented for the agency to receive a bulk request for millions of records without clear investigative ties. Previously, law enforcement would request tax information for a small number of individuals, providing full legal names, addresses, and justifications for each inquiry.
A System Built for Speed, Not Accuracy
The planned system would streamline ICE’s ability to retrieve addresses without IRS staff reviewing each case. Instead, DHS would upload a spreadsheet containing names and previous locations, along with supposed justification for the inquiry. The IRS system would then attempt to match these entries with tax records and return the most recent address on file — assuming all required fields were completed.
But the system’s dependence on names, rather than unique taxpayer identification numbers, raises significant concerns. IRS engineers involved in reviewing the blueprint say this opens the door to false matches — returning address data for innocent people who simply share similar names with ICE targets.
Critics also note that the system includes no safeguards to limit the volume or frequency of data requests. Experts worry it could be scaled up to reveal far more than just addresses — including details about employment, income, or family members.
Internal Dissent and Staff Departures
The project has triggered strong resistance inside the IRS. In a tense meeting held in March, DHS officials floated the idea of retrieving addresses based solely on names and states. IRS lawyers pushed back sharply, warning that such a move could expose them to legal liability, as privacy laws strictly prohibit sharing tax information without specific legal justification.
The friction prompted several resignations within the IRS’s legal, privacy, and IT departments in the following weeks. Sources say many staff felt the plan was legally risky and violated the agency’s mission to protect taxpayer confidentiality.
Despite internal objections, engineers at IRS offices in Maryland and Texas are moving ahead with building the system, which could launch as early as the end of July.
Lawsuit Challenges Plan, But Court Allows It — For Now
In March, immigrant rights groups filed a lawsuit aiming to block the IRS-DHS data-sharing plan. They argued that the MOU violated federal privacy protections and allowed ICE to bypass critical oversight. However, in May, a federal judge upheld the agreement, ruling that it complied with Section 6103 of the tax code — the law governing disclosure of IRS information.
That ruling did not consider the technical blueprint of the system, which had not yet been finalized at the time. The lawsuit remains ongoing, leaving open the possibility of further legal scrutiny.
DHS Eyes Broader Access — Including U.S. Citizens
In a development that could further expand the system’s reach, documents reviewed by ProPublica show that DHS is exploring ways to amend the agreement to cover not only undocumented immigrants, but also U.S. citizens and legal residents involved in any criminal investigation.
An ICE attorney recently proposed updating the MOU to include individuals “associated with criminal activities,” regardless of their citizenship status. Before his removal, De Mello rejected this expansion, urging top Treasury officials to personally sign off on such a significant shift. It’s unclear whether the proposal will be revived.
