Judge Mulls How Homeland Security Could Use Immigrant Tax Info

Two Chicago groups seeking to enjoin an agreement between the Department of Homeland Security and the Internal Revenue Service over the sharing of immigrant’s tax information must navigate tricky legal questions to do so.

In a Wednesday hearing, Judge Dabney L. Friedrich of the US District Court for the District of Columbia questioned the standing of the two not-for-profit groups—Centro de Trabajadores Unidos and Immigrant Solidarity DuPage. They are seeking a preliminary injunction to stop the disclosure of Individual Taxpayer Identification Number information between the two agencies amid the backdrop of a larger, Trump Administration immigration crackdown.

But the groups’ standing is intertwined with the merits of their case. They argue that a large-scale disclosure of tax information is a violation of IRC Section 6103, which keeps IRS tax information confidential from other branches of government with exceptions for criminal prosecutions.

“We’re in an unfortunate position of being either too early or too late,” said the groups’ counsel, Nandan Joshi of the Public Citizen Litigation Group, who argued its injunction was founded in a fear the authorities would seek “not for obtaining evidence for an investigation but a mass request” for collecting data on large numbers of people it can deport.

The groups previously failed to get a restraining order in March, and an information sharing agreement was signed soon after. The government furnished a redacted copy of the agreement and opposes releasing an unredacted version to the public citing law enforcement sensitivity. Given the disclosure of an unredacted copy to the plaintiff’s counsel, the judge gave the plaintiffs another week to tweak their proposed order based on the specifics in the agreement.

The IRS has argued it would stick to the letter of the law, while the plaintiffs argue that Section 6103’s exceptions for information sharing for criminal investigations were intended to be narrow and specific, contravening the Trump administration’s statements that all undocumented immigrants are criminals.

Paper Cases

The government’s counsel, Joseph Sergi of the Department of Justice, agreed with Fredrich’s assessment that the agreement was “unprecedented.”

But the government’s position is that it’s acting within the law on statutes that simply haven’t been enforced before. The government widely uses the exceptions to Section 6103 and obtains information on about 30,000 people a year. Obeying Section 6103 would still entail providing the IRS with names, addresses, and justifications of why it needs tax information on a person-by-person basis.

Fredrich, who was for a decade an assistant attorney at the US Attorney’s Office for the Southern District of California, also cited how common it was to open cases for immigrants who have re-entered the country under the low-level proceedings set forth in 1912. 8 U.S.C. 1326.

She called these “paper cases,” and expressed concern that front-line IRS agents would obey the law but still leave room for the information to be abused by higher-ups and policy directors given the coordination of the agencies. The judge said the government’s use of the information would be “concerning” if it was used, for instance, to contact large numbers of non-citizens and threaten prosecution if they didn’t self deport.

Or, if it opened large numbers of “paper cases” to justify gathering IRS information on people, seizing them using that information, and then closing the cases in order to deport them. A move similar to that has taken place in Virginia with the high-profile case of alleged MS-13 gang member Villatoro Santos, said Michael Kirkpatrick, also of Public Citizen Litigation Group.

That fear should help the groups establish standing, Joshi said, because there isn’t an easy mechanism in the law to rectify mistakes the IRS may make in disclosing tax info for deporting people except for suing the government using IRC Section 7413‘s remedies for unlawful disclosure of tax information.

Given only 30,000 cases a year use the exception, Joshi doubted that the government could realistically use the information for hundreds of thousands of cases.

But Joshi conceded his only evidence to establish that the government could be poised to break the law—something Fredrich said she can’t assume in bad faith—was media reports starting with a Feb. 28 Washington Post article that indicated the IRS had been asked for information, including home addresses of 700,000 people suspected of being in the country illegally.

Public Citizen Litigation Group, Raise the Floor Alliance, and Alan Morrison with the George Washington Law School represent the plaintiffs.

The case is Centro de Trabajadores Unidos v. Bessent, D.D.C., No. 1:25-cv-00677, preliminary injunction hearing 4/16/25.