The verdict clears the pathway for a data sharing agreement between the IRS and DHS to advance while criminal charges are being filed.
A federal judge on Monday shared data on taxpayers facing criminal investigations with immigration authorities and refused to block advocacy groups from denying tax compliance by illegal immigrants.
The judge noted that the terms of the IRS-DHS memorandum do not violate the data sharing requirements set forth in federal law, such as submitting a written request for data, identifying specific individuals under criminal investigations, and providing justification for the request. Second, only after confirming compliance with Section 6103 of the Tax Act will the IRS be able to share limited identity information such as names and addresses.
“At its core, this case presents a narrow legal issue. Does the memorandum between the IRS and the DHS violate the Internal Revenue Act? Not,” writes Friedrich. “The plain language of 26USC §6103(i)(2) requires disclosure under certain circumstances and assumptions outlined in the memorandum, and as such, the plaintiffs have failed to show that they are likely to succeed in their claim.”
The ruling marks the legal victory of the Trump administration, pushing for the integration of federal taxes and immigration enforcement as part of a broader crackdown on illegal immigration.
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“Releasing such information will result in harm and harm to privacy in the form of liberty arrest, detention or other deprivation related to the Trump administration’s express intention to engage in large-scale actions against U.S. immigrants,” the group wrote in their complaint.
However, the court found that the IRS-DHS contract is governed by law. This is because Section 6103 of the Tax Act generally prohibits the disclosure of confidential tax return information such as names and addresses, and therefore includes criminal execution exceptions. The judge pointed out in her ruling that the memorandum did not allow disclosures for enforcement of citizen immigrants, including deportation that has not been linked to criminal charges.
Despite the plaintiffs expressing concern that the DHS could use the information for a broader deportation effort that is not related to criminal cases, Friedrich said there was no evidence that the agencies involved were violating the agreement or the law, and that the advocacy groups’ fears were based on media reports that “the Trump administration is seeking location information for 700,000 Irogali immigrants.”
“In this limited record, the court cannot assume that the DHS intends to use shared information to promote civil rather than criminal proceedings,” the judge wrote, adding that if the DHS decides to suspend a criminal investigation and instead pursues deportation, the agency must return the information to the IRS and be prohibited from using it in any way.
The court also rejected allegations that the IRS had illegally overturned its past position. Advocacy groups pointed to old IRS guidance suggesting that address-only requests cannot be respected, but Friedrich found that binding policies had not been withdrawn. He concluded that even if there were any changes, it would not be subject to review under the Management Procedure Act.
Requests for comment sent to the plaintiff’s attorney were not immediately returned.
