The IRS's Unlawful Data-Sharing with ICE Risks Undermining Tax Compliance and Demands Congressional Oversight
Source: Shirin Ali. "The IRS shared info it shouldn’t have with ICE. What now?." September 10, 2026. slate.com
The Gist
The IRS secretly and illegally shared over a million undocumented immigrants' addresses with ICE to help with deportations, and a court just ruled this broke the law. The author argues this betrayal of trust could backfire badly—since undocumented immigrants already pay $90 billion in taxes based on promises their information would stay private, if people stop trusting the IRS and stop filing taxes, the government could lose tens of billions in revenue, so Congress needs to step in and hold someone accountable.
Conclusion
Congress has both the authority and the obligation to investigate and impose consequences on the IRS and DHS for their unlawful sharing of taxpayer information, because this breach threatens the trust-based tax compliance system that generates significant federal revenue from undocumented workers.
Premises
- A federal appeals court found the IRS violated federal law by sharing 47,000 taxpayer addresses with DHS/ICE without following required legal procedures for case-by-case review.
- The IRS abandoned its longstanding practice of individualized review in favor of a 'mass, automated review of millions of records at the press of a button,' processing bulk requests without verifying they met legal criteria.
- ICE's requests were facially deficient—using one contact person (Lyons) for all 1.28 million requests and failing to provide required justification—yet the IRS approved them anyway.
- The IRS has spent decades building trust with undocumented immigrants to encourage voluntary tax filing, promising that filing would not trigger deportation.
- Undocumented workers pay an estimated $90 billion annually in taxes despite being ineligible for most social program benefits.
- This breach of trust could cause undocumented workers (and potentially others) to stop complying with tax law, and even a 1-percentage-point drop in compliance would cost $40 billion in federal revenue.
- Affected individuals now have legal standing to sue, and the IRS/government could face civil and criminal liability for willful unlawful disclosure.
Assumptions
- Voluntary tax compliance is meaningfully dependent on trust in agency confidentiality promises, such that a breach will measurably reduce compliance.
- Congress has sufficient bipartisan or institutional will to conduct oversight, which the author suggests may depend on election outcomes.
- The deterrent effect of publicized ICE/IRS cooperation will outweigh other factors (like fear of deportation regardless of tax filing) in taxpayers' decision-making.
- Legal consequences (lawsuits, oversight hearings) are effective mechanisms for preventing future violations.
- The appeals court's legal interpretation is correct and will stand up to further legal challenge.