Agency Data Sharing Heightens Deportation Risk for Unauthorized Work

Federal data sharing between the Internal Revenue Service and Immigration and Customs Enforcement is reshaping immigration enforcement in the United States, raising the risk of deportation for people linked to unauthorized work even when they have reported income and paid taxes. As of September 7, 2025, immigration attorneys across the country report denials at consulates, refused entries at airports, and removal cases tied to work activity that falls outside visa rules, with IRS records now surfacing in immigration files. According to analysis by VisaVerge.com, the latest moves fit a broader federal strategy to widen the flow of information across agencies to find and remove people deemed removable under immigration law.

The cornerstone change is an IRS‑ICE memorandum of understanding (MOU) finalized in April 2025. For the first time, the IRS agreed to provide ICE with taxpayer details in specified situations, including names, addresses, and taxable periods for people under final orders of removal or under federal criminal investigation, including investigations related to unauthorized employment or failure to depart after 90 days. This departure from long‑standing tax privacy practice marks a new phase of risk for noncitizens who previously believed that filing honest tax returns could not harm their immigration prospects.

The policy shift has roiled the IRS. Senior officials, including Acting Commissioner Melanie Krause and chief privacy officers, stepped down in protest of the agreement, arguing it erodes the agency’s decades‑old promise to keep tax data confidential. The MOU is now the focus of ongoing lawsuits in federal court. Plaintiffs say the arrangement breaks taxpayer privacy protections in Internal Revenue Code Section 6103 and violates the Administrative Procedure Act. The government defends the agreement as within the bounds of current law and necessary to carry out federal immigration enforcement. Those challenges are continuing through appeals as of mid‑2025.

On the ground, the impact is immediate. Community groups and tax advisers report a drop in tax filings among undocumented immigrants and among visa holders worried that a return noting a side job could trigger an ICE lead. Lawyers say even small, past instances of unauthorized work—such as a brief food delivery shift by an international student years ago—are now reappearing during visa renewals and at ports of entry. For many, the fear is simple: tax records that once suggested good faith now carry a different meaning when cross‑checked by immigration officers aiming to build a deportation case.

Attorneys describe a pattern with employment‑based visas. H‑1B workers tied to a single employer have seen requests for evidence, denials, and sometimes expedited removal proceedings when IRS data points to outside income. F‑1 students, whose work is tightly limited by status rules, report more intense questioning at consulates and airports, with alleged unauthorized work cited as grounds for visa refusal or cancellation. In several reports gathered by advocates and law firms, the alleged work occurred years earlier, but the data trail remained.

This shift fits a larger federal approach under President Trump that extends immigration enforcement reach across agencies beyond DHS. Federal units not traditionally linked to civil immigration—such as the FBI, ATF, DEA, the U.S. Postal Service, and the IRS—have been assigned roles in identifying targets through data matching. The aim, as described by policy officials, is to sharply increase removals, potentially up to one million per year, by using records spanning tax, health, public benefits, and law enforcement systems. The government views this as efficient use of public databases; critics see a dragnet that captures both major and minor status violations.

Local police are also more directly involved through expanded Section 287(g) agreements, which deputize officers to act in an ICE capacity. That has translated into more immigration arrests from routine traffic stops and minor offenses, with personal data collected locally feeding into federal checks. With IRS records now in the mix, a simple stop can escalate if officers find a prior removal order or suspect unauthorized work from earlier tax filings.

Policy Changes Overview

At the heart of the April 2025 IRS‑ICE MOU is a controlled channel for ICE to request taxpayer information tied to specific enforcement triggers. Requests can focus on people with a final order of removal or those in federal criminal probes, including cases tied to unauthorized employment or failure to depart within 90 days.

The data categories include:
– Names
– Addresses
– Taxable/reporting periods

Lawyers warn this is enough to cross‑reference with employer records, visa terms, and travel history. While the IRS historically limited disclosures to narrow criminal tax contexts, this agreement widens access for immigration enforcement in ways advocates say are unprecedented.

ICE’s stated goals:
– Identify people who broke status rules and then skipped departure
– Uncover money flows linked to immigration fraud

Critics’ concerns:
– The sweep will catch students and workers who made minor mistakes (e.g., a short freelance gig or off‑campus shift)
– Tax filing—previously a sign of good faith—may now trigger deportation for unauthorized work

Although the IRS calls the MOU “lawful and necessary,” the agency’s trusted position has been damaged. Advisers in immigrant communities report more people asking whether to file at all. Some have delayed returns or filed partial income out of fear of data sharing reaching ICE. Economists and tax advocates warn this “chilling effect” could lower compliance and push families into the shadow economy, undermining long‑standing efforts to keep tax reporting separate from immigration status.

Impact on Applicants and Communities

The practical risks for noncitizens fall into several categories:

1. Employment‑tied visas
   • H‑1B workers who show income from other sources face heightened scrutiny.
   • Engineers on a side contract or researchers with unapproved stipends have reported requests for evidence, denials, or expedited removal.
2. Student visas
   • F‑1 students face tighter checks for any payroll or app‑based gig income.
   • Even short or past work may be cited as grounds for visa refusal or cancellation.
3. People with prior removal orders
   • Addresses and taxable periods confirmed through IRS records can speed tracking and enforcement.

Key implications:
– The old assumption—“if you pay taxes, you’re safer”—no longer holds in practice.
– Filing taxes remains legally required, but can be used as the basis for a Notice to Appear and, in some cases, detention pending hearing.
– Mixed‑status families may avoid public benefits or skip tax credits out of fear, harming children who are U.S. citizens.

“If tax data can move into immigration files, other sensitive records could follow.”
Privacy advocates warn that health files, benefits history, and law enforcement notes could increasingly be linked to immigration screening.

The government maintains the MOU respects Section 6103 limits and contends that lawsuits challenging the arrangement are misplaced. Officials also argue plaintiffs lack standing because the agreement targets specific enforcement categories. Those legal arguments are being tested in appeals and could produce rulings that either constrain or uphold the data flow.

Broader Context and Enforcement Expansion

This debate is part of a long post‑9/11 arc of information policy. Over two decades, immigration systems have incorporated more data sources and reduced barriers between agencies. The IRS had been an outlier in protecting taxpayer privacy; the 2025 MOU represents a marked departure from that tradition.

Additional enforcement channels amplifying the effect:
– Expanded Section 287(g) agreements that deputize local police
– Routine stops leading to database checks that now may include IRS‑derived tax periods and addresses
– Cross‑agency data matching with FBI, ATF, DEA, USPS and others

That means even a minor traffic ticket could trigger a chain reaction if it uncovers a prior visa overstay or evidence of non‑authorized income.

Practical Steps and Community Guidance

Community legal clinics and bar associations suggest several practical measures for those worried about exposure:

• Before traveling abroad for visa stamping, weigh the risk that consular officers could scrutinize old returns showing non‑employer income.
• Seek counsel before signing statements about past side jobs or other work.
• Students should keep clear documentation of authorized on‑campus work and training.
• Families with old removal orders should consult an attorney to explore options proactively.

These steps do not eliminate legal risk, but they can help people understand potential consequences and prepare responses.

Government Position and Public Resources

The official government line is that immigration enforcement is now a whole‑of‑government effort that includes tax records. For enforcement policy information, the agency directs the public to the U.S. Immigration and Customs Enforcement website at ICE.gov. Public statements emphasize targeted use of data; opponents warn that “targeted” can broaden as definitions expand and local police act as force multipliers.

Key Takeaways

• The April 2025 IRS‑ICE MOU authorizes targeted sharing of taxpayer names, addresses, and taxable periods for people under final removal orders or federal criminal investigation.
• Legal challenges argue the MOU violates Section 6103 and the Administrative Procedure Act; appeals were ongoing as of mid‑2025.
• The MOU has already affected behavior: reduced filings, increased fear among visa holders, and more scrutiny at consulates and ports of entry.
• Expanded Section 287(g) agreements and interagency data links amplify enforcement reach, potentially turning routine encounters into immigration cases.
• For many families, filing an honest tax return now carries a difficult new consideration: how ICE and other agencies might interpret that information in enforcement contexts.

The border between tax compliance systems and immigration enforcement has narrowed. Whether the MOU becomes a permanent tool or a temporary policy pivot will depend on court rulings, policy decisions in Washington, and public response during future filing seasons.