In a significant development that has raised concerns among immigrant advocates, the Internal Revenue Service (IRS) has officially reached an agreement with U.S. Immigration and Customs Enforcement (ICE) to share tax information regarding certain immigrants who lack legal status. This memorandum of understanding (MOU), signed on Monday, represents a major shift in how tax records may be accessed and utilized by immigration authorities.

The announcement was made public through a court filing on the same day, though the exact timeline for when these information-sharing practices will commence remains unclear. According to the terms laid out in the agreement, ICE officers will be able to request information from the IRS about immigrants who have been issued final orders of removal or are under criminal investigation, which may include cases involving individuals who have not left the country within a specified timeframe.

Sophie Delquie, a senior adviser for public affairs at the Treasury Department, noted that this agreement establishes a clear and secure process to support law enforcements efforts to combat illegal immigration. This statement aligns with the broader goals of the Biden administration, which has emphasized the need for enhanced coordination between federal agencies to enforce immigration laws while addressing public safety concerns.

The MOU was signed by both Secretary of Homeland Security Kristi Noem and Secretary of the Treasury Scott Bessent, marking a collaborative effort between two key departments in the federal government. However, many sections of the 15-page document are redacted, leading to significant uncertainty regarding the specifics of what information will be shared and the protocols that will govern its use by ICE officers.

Despite reassurances from the government, numerous immigrant advocacy groups have voiced strong opposition to this agreement. Murad Awawdeh, the CEO of the New York Immigration Coalition, expressed deep concerns, stating, The IRS's decision to share confidential information with the Department of Homeland Security threatens the safety of thousands of workers while forcing them further into the shadows and discouraging tax compliance. He emphasized that rather than penalizing individuals who contribute to the economy and adhere to tax regulations, the government should focus on safeguarding their rights and fostering trust.

The Department of Homeland Security has not yet responded to requests for comments regarding the ramifications of this agreement, which comes amid ongoing litigation filed by immigrant advocacy organizations aiming to prevent any sharing of information between the IRS and ICE.

It is important to note that immigrants without legal status contribute significantly to the U.S. economy, paying billions of dollars in taxes through a unique nine-digit code known as the Individual Taxpayer Identification Number (ITIN). Advocates and tax experts have long pointed out that the IRS has historically assured undocumented taxpayers that their information would remain confidential, encouraging them to file tax returns without fear of repercussions.

A group of congressional Democrats has also expressed their dissent regarding this agreement. They sent a letter to Secretary Noem and the head of the IRS, urging them to reconsider their decision. The letter highlighted the danger of creating fear among immigrants regarding their tax filings. If immigrants fear that filing taxes could expose them to deportation, many will choose not to file, reducing Federal revenues that contribute to funding public schools, health care, and disaster relief for Americans while shifting resources to the informal economy, they argued. This sentiment underscores the potential negative impact on federal revenues and the tax system as a whole, as it could inadvertently lead to increased deficits and a heavier tax burden on law-abiding American citizens.

Despite the mounting criticism and calls for reevaluation, both the IRS and the Department of Homeland Security have decided to proceed with this agreement. The Treasury Department has maintained that while it is committed to protecting taxpayer confidentiality, it also acknowledges that there are legal provisions that allow for information sharing in the context of criminal investigations. The bases for this MOU are founded in longstanding authorities granted by Congress, which serve to protect the privacy of law-abiding Americans while streamlining the ability to pursue criminals, the department stated in an email.