Immigrant-rights advocates asked a federal court in September to investigate whether contractors helped obtain protected tax records for immigration enforcement. Their filings challenge the Internal Revenue Service (IRS) role in a deportation effort involving Immigration and Customs Enforcement (ICE).
The motions, filed September 9–10, 2026, also seek records about the transfer of hundreds of immigrants’ information by the Social Security Administration to the Department of Homeland Security and DOGE in March 2025. The groups say that transfer raises a separate question about how agencies handle sensitive personal data.
A First Circuit panel heard arguments in a related case on October 7, 2026. The appeal concerns a federal judge’s February 2026 order blocking the data-sharing agreement.
The dispute involves tens of thousands of taxpayer records. The government has said 47,000 people’s information was shared under the agreement.
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Tax law allows disclosure only for qualifying criminal investigations
Treasury and Homeland Security signed a memorandum of understanding in April 2025. It allowed immigration officials to ask the tax agency for names, addresses and filing years for people with removal orders or under criminal investigation.
The government relies on an exception in Section 6103 of the tax code. That provision permits disclosures connected to certain non-tax criminal investigations. The government’s position treats remaining in the country after a removal deadline as a possible basis for such an investigation.
The law otherwise restricts the sharing of tax information, including addresses and earnings. The agency’s agreement triggered internal objections: several senior officials, including the acting commissioner and chief privacy officers, resigned, arguing it likely violated privacy laws. The top lawyer was demoted and replaced as the agreement took shape.
The scale of the requests is part of the legal dispute. In summer 2025, immigration officials initially sought addresses for 1.28 million people, including people who had not passed the 90-day period to leave after a removal order. The research also records a separate figure of 7 million taxpayers on whom the agency sought data.
Judges have issued conflicting rulings as the challenges move through court
At the October 7 argument, Justice Department attorney Jacob Christensen said all 47,000 people whose information was shared had final orders of removal. He said they had passed the 90-day mark.
U.S. Circuit Judge Seth Aframe questioned whether a removal order alone could support a criminal investigation. He compared the reasoning to treating every driver as potentially under investigation for lacking auto insurance. Judge David Barron asked whether labeling someone “under investigation” satisfied the statute.
Judge Julie Rikelman pointed to the initial request’s inclusion of people who had not passed the 90-day period. She asked: “How could there be a good faith belief that a crime has been committed?” Christensen later said, “I don't know what led IRS to do that,” when asked whether the 90-day determination related to a criminal statute.
Joshua Rosenthal of the Asian Law Caucus, attorney for the lead plaintiff, said the law requires a “meaningful” investigation. He argued that requests covering 1.2 million people could not meet that standard and said broader relief would protect the groups’ membership lists.
The Massachusetts case is one of several challenges. In a separate suit, Centro de Trabajadores Unidos and Immigrant Solidarity Dupage filed on March 7, 2025. An amended complaint on March 26 added Somos Un Pueblo Unidos and Inclusive Action for the City, along with federal officials and agencies as defendants.
District Judge Dabney Friedrich denied a temporary restraining order on March 20, 2025, finding the plaintiffs had not shown imminent injury. In May 2025, the court denied a preliminary injunction, concluding the tax code likely allowed address sharing for criminal investigations but not civil enforcement. The D.C. Circuit affirmed that denial in February 2026.
The government told a D.C. federal court on August 18, 2025, that sharing taxpayer return information had begun, revising an earlier position that it had received or answered no such requests. By February 5, 2026, two federal courts had barred further sharing under the agreement, and the immigration agency was barred from using data it had received. On February 11, the tax agency told a court some confidential taxpayer data had been improperly disclosed.
A separate D.C. Circuit decision later affirmed an injunction against sharing taxpayer return information. On September 8, 2026, Judge Cornelia Pillard wrote that the tax agency had not required a “specific reason” connecting requested records to a qualifying investigation. The panel also noted the same contact person was listed for every request involving 1.28 million taxpayers.
Advocates say fear of disclosure could reach beyond immigration cases
The September motions were filed by Asian Law Caucus, Greater Boston Legal Services and Keker, Van Nest & Peters on behalf of the Community Economic Development Center, the National Korean American Service and Educational Consortium, the National Parents Union and Undocublack Network.
One motion asks whether the government is using ThunderCat and Palantir to obtain taxpayer information despite the February court order. It points to a June 2026, $10 million contract with ThunderCat Technology, LLC, for “Individual Taxpayer Identification Number (ITIN) data” and analytics for the department’s Homeland Security Investigations unit. The filing also cites disclosures that immigration officials shared confidential Medicaid data with Palantir through a Microsoft Teams chat.
Josh Rosenthal, workers’ rights program director at Asian Law Caucus, said, “The government cannot outsource its way around the law.” He said the motions seek answers about whether protected taxpayer information moved through technology contracts. Sarah Salomon, a partner at Keker, Van Nest & Peters, said the filings seek to establish who received protected tax and Social Security information and how it was used.
The tax records include information from people who use Individual Taxpayer Identification Numbers because they cannot obtain Social Security numbers. The tax agency had assured ITIN holders their information would not be shared. The Community Economic Development Center said membership and attendance fell as noncitizens feared disclosure.
A 2024 Institute on Taxation and Economic Policy study found undocumented immigrants paid $96.7 billion in federal, state and local taxes in 2022, about $8,889 per person. More than a third went to Social Security and Medicare, programs those taxpayers cannot access. Nina Olson, executive director of the Center for Taxpayer Rights and a former senior tax agency official, called the data-sharing move “unprecedented.”
About 85% of taxpayers comply voluntarily, according to the research. A one-percentage-point decline could mean roughly $46 billion in uncollected revenue. Senate Democrats said the agency’s disclosure of improperly shared records supported their warnings about privacy risks.
As of October 23, 2026, the groups’ September motions are seeking information about the Social Security transfer and possible contractor access. The administration has provided only a heavily redacted record of the Social Security Administration’s data transfer.
This article provides general information and is not legal advice. Consult a qualified immigration attorney about your specific case.
