IRS and ICE Expand Data Sharing Under Memorandum of Understanding in 2026

(WASHINGTON, D.C., AND MASSACHUSETTS) — A pair of federal court injunctions in late 2025 and early 2026 protect ITIN filers from IRS data sharing with ICE/DHS, with no reversal in sight, reshaping how ITIN filers approach 2026 tax filing and their immigration considerations.

For many families, that changes the basic question for tax season. The issue is no longer whether the IRS may hand over ITIN filer information to immigration enforcement under the April 7, 2025 agreement. Right now, it may not.

As of April 2026, one federal court order blocks the IRS from sharing ITIN filers’ taxpayer data with ICE or DHS. A second order bars DHS and ICE from viewing, using, or acting on IRS data that had already been received. Together, those rulings put the IRS-ICE Memorandum of Understanding on hold in practical terms.

That matters because the April 7, 2025 IRS-ICE Memorandum of Understanding was found likely unlawful under Internal Revenue Code Section 6103. That section is the main federal tax privacy rule. In simple terms, it says taxpayer return information is private unless a narrow legal exception applies.

Section 1: Overview: IRS-ICE data sharing and ITIN filers in 2026

Internal Revenue Code Section 6103 sits at the center of this fight. Think of it as a locked file cabinet for tax records. The government may open that cabinet only in limited situations set by law.

Under the April 7, 2025 agreement, ICE could ask the IRS for personal information on people with final removal orders or those under investigation. Courts later found that setup likely broke the tax code’s privacy limits. So the cabinet was closed again. Firmly.

Judge Colleen Kollar-Kotelly in Washington, D.C. issued a preliminary injunction in November 2025. Judge Indira Talwani in Massachusetts went further in February 2026 by blocking DHS and ICE from using any IRS data they had already received.

For ITIN filers, the practical effect is direct. Filing a 2026 tax return does not, under the current court orders, open a path for ICE enforcement through IRS data sharing.

Section 2: Key timeline and facts for ITIN filers

The timeline shows how fast the dispute moved.

On April 7, 2025, the IRS and ICE, which operates under DHS, signed the agreement. It allowed ICE to seek names, addresses, and taxpayer identifiers tied to certain immigration enforcement targets.

By August 2025, ICE requested data on 1.28 million taxpayers. The IRS disclosed 47,289 addresses. Courts later focused on 42,695 via flawed TIN Matching, which did not include proper address verification.

November 2025 marked the first major court stop. Judge Colleen Kollar-Kotelly halted further sharing and found the agreement likely violated tax privacy law and IRS privacy rules.

February 2026 brought a second block. Judge Indira Talwani barred DHS and ICE from viewing or using any IRS data they had received. Her order applied even if only one DHS employee held the information.

As of February 27, 2026, both injunctions remained in effect. No higher court had overturned them.

Section 3: Legal framework and court rulings

Two district courts reached related conclusions from different angles.

In Washington, D.C., Judge Colleen Kollar-Kotelly focused on whether the IRS could continue sharing taxpayer data under the agreement. Her November 2025 ruling said the arrangement likely conflicted with Internal Revenue Code Section 6103. That stopped more transfers.

In Massachusetts, Judge Indira Talwani dealt with the data already handed over. Her February 2026 order blocked DHS and ICE from seeing or using that information at all. That matters because privacy harm does not end once records leave the IRS.

The Center for Taxpayer Rights was part of the legal challenge in Washington, D.C. The case in Massachusetts added another layer of protection. Together, the rulings built a wall on both sides. One side stops future sharing. The other side blocks use of past disclosures.

A D.C. Circuit ruling later addressed a narrow issue. It did not lift the blocks. So the current privacy protections remain in place unless a higher court changes them or Congress rewrites the law.

Dorothy Chang of the Asian Law Caucus has said ICE cannot use the prior data or rely on a new agreement while the orders stand. That matches the practical reading of the February 2026 order.

Senator Ron Wyden of the Senate Finance Committee criticized the sharing as flawed and dangerous. His objection centered on privacy risks and the chance of misidentification, especially after the disputed address matching.

Section 4: Practical implications for ITIN tax filers in 2026

For tax season, the message is straightforward. ITIN filers may file 2026 taxes without fear that IRS data will trigger ICE enforcement through the blocked sharing channel.

That does not mean tax filing decides an immigration case. It does mean the courts have cut off a specific enforcement path tied to IRS records. For many households, that restores some trust in the filing process.

Tax compliance may still matter in other ways. In many immigration matters, proof of filing and paying taxes may help show good-faith compliance with U.S. law. It may also support future applications where a record of tax filing is relevant.

ITIN holders also pay into public systems. Undocumented immigrants contribute billions to Social Security and Medicare through payroll and tax payments. If people fear that filing taxes will expose them to immigration enforcement, participation can drop. Courts appeared aware of that concern.

Still, caution makes sense. These rulings protect taxpayer confidentiality under current law. They do not erase other forms of immigration enforcement that do not depend on IRS records.

✅ If you are an ITIN filer, file 2026 tax return with confidence that IRS data sharing is blocked; monitor updates for any potential policy shifts

Section 5: Current status and what filers should watch

Late February 2026 is the last confirmed checkpoint in the court record described here, and the picture was stable then. The injunctions remained in effect. No higher court had reversed them.

No transition period has reopened data access. No special exception beyond Section 6103 guidelines has changed the rule. For now, the IRS cannot share ITIN filer tax data with ICE or DHS under the blocked arrangement, and DHS and ICE cannot use what they already received.

Future changes could still come from two places. One is the courts. An appeals court or the Supreme Court could alter the orders. The other is Congress, which could change the tax privacy law itself.

Until then, ITIN filers generally face a 2026 filing season with stronger privacy protections than many feared in 2025. That does not remove every immigration risk. It does remove the IRS data-sharing route that sparked this fight.

⚠️ Current status: Injunctions remain in effect as of late February 2026 with no higher court overturn; any future changes depend on court rulings or legislative action

For readers watching this issue, the key date is not a filing deadline alone. It is the next court action or any bill that changes Internal Revenue Code Section 6103. Unless that happens, the rule for 2026 is plain: ITIN filers may file, and ICE cannot use IRS data from the blocked IRS-ICE Memorandum of Understanding.

This article discusses legal developments and does not constitute legal advice. Consult a qualified attorney for case-specific guidance.