Appeals court upholds ruling barring IRS from sharing data with ICE

A federal appeals court on Tuesday upheld a lower court ruling blocking information sharing between the Internal Revenue Service (IRS) and U.S. Immigration and Customs Enforcement (ICE) after the immigration agency requested the last known address of millions of people.

The three-judge panel for the U.S. Court of Appeals for the DC Circuit panel found ICE’s sweeping request for addresses of 1.28 million people who may be unlawfully present in the U.S. violated laws established in the wake of the Watergate scandal that bars the IRS from sharing information with other agencies unless it meets “stringent conditions.”

The ruling finds plaintiffs were likely to prevail in the matter and agreed the policy was reviewable under the Administrative Procedures Act, upholding a ruling from November of last year that blocked the IRS from aiding with deportations.

The IRS can share information with other agencies to help prosecute certain crimes, but those agencies must also list a specific point of contact.

“The IRS failed to require ICE to provide a ‘specific reason’ why the requested return information ‘is or may be relevant to [a qualifying] proceeding or investigation,’ as the statute demands,” Judge Cornelia Pillard, an Obama appointee, wrote for the panel.

“It entirely fails to ensure that ICE lists a federal employee, let alone one ‘personally and directly engaged’ in a qualifying investigation of a particular taxpayer. That failure has serious consequences. When ICE requested information on 1.28 million taxpayers in the summer of 2025, ICE identified the same person as the point of contact for every single request.”

The panel also found information sharing would violate privacy laws.

“The Data-Exchange Procedure reduces noncitizens’ privacy rights in their tax returns. By providing a distinct, automated pathway for ICE to request noncitizens’ information, the Data-Exchange Procedure deprives noncitizens of the protections that section 6103 guarantees to all taxpayers,” the panel found.

The ruling is another blow to ICE, which hoped to use the data to help locate migrants it is trying to support.

The Trump administration has pushed to link a number of government databases in the hopes of locating those who may not be lawfully present in the country.