- The D.C. Circuit upheld a preliminary injunction blocking IRS address sharing with ICE for deportation efforts.
- The court said the policy likely violated Section 6103 privacy rules and the Administrative Procedure Act.
- Before the halt, the IRS had already shared 47,289 taxpayer address records under the program.
The U.S. Court of Appeals for the District of Columbia Circuit upheld an injunction Tuesday blocking an IRS policy that shared taxpayer addresses with Immigration and Customs Enforcement for deportation efforts. The panel found the arrangement likely violated federal tax-privacy rules and the Administrative Procedure Act.
The order keeps the exchange halted. The underlying case continues.
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Judge Cornelia Pillard wrote for the three-judge panel that the IRS had not required ICE to explain why requested return information “is or may be relevant” to a qualifying investigation. She described the government’s defense as “weak sauce.”
The arrangement began in July 2025 under an agreement between the Treasury Department and the Department of Homeland Security. ICE sought last-known addresses for as many as 1.28 million people it said were under criminal investigation for failing to comply with final removal orders.
The IRS disclosed roughly 47,289 taxpayer address records before the injunction took effect. Those disclosures became the central measure of the program’s reach.
The exchange relied on address fields that did not reliably contain addresses
The IRS created a “Data-Exchange Procedure” for handling ICE requests. Under it, ICE could submit a five- or nine-digit number in an address field, even when the number was not an actual ZIP code.
The system also accepted entries including “Unknown Address,” “Failed to Provide,” and “NA NA.” Another accepted placeholder appeared as “Don’t Care 12345.”
More than 90 percent of the disclosed records came through a taxpayer-identification-number matching process rather than a full name-and-address verification. That process allowed the government to compare records without conducting a complete review of each person’s identifying information.
The court focused on the resulting gap between automated matching and the statutory conditions for disclosure. The panel said the procedure:
“automates the review of millions of records without any individual review or any other means of ensuring compliance with the legal prerequisites to releasing each individual taxpayer’s information.”
The judges treated the procedure as reviewable “final agency action” under the Administrative Procedure Act. The government had argued that the process was only an internal operational step and should not be subject to that review.
The court said statutory safeguards could not be bypassed
The ruling centered on Section 6103 of the Internal Revenue Code, which tightly restricts the disclosure of taxpayer return information. The panel said post-Watergate privacy protections require agencies to satisfy strict legal conditions before the IRS can share protected records.
Pillard said the procedure did not require ICE to provide an actual address for a taxpayer. It also did not require the specific explanation the statute demanded before return information could be released for a qualifying investigation.
The panel concluded that the arrangement likely bypassed disclosure safeguards. It also said the process created a separate route for ICE that reduced noncitizens’ privacy protections.
That finding is preliminary. The appeals court did not resolve the case on the merits, but its decision leaves the injunction blocking further sharing under the challenged procedure.
The judges also rejected the administration’s broader objection to the court’s review. Pillard wrote that the complaint was “a gripe with Congress, not the court.”
The appeal came from a challenge by taxpayer and business groups
The Center for Taxpayer Rights and the Main Street Alliance were among the groups that brought the lawsuit. They challenged the data exchange as inconsistent with federal privacy requirements.
Pillard wrote the opinion for the panel. U.S. Circuit Judges Patricia Millett and Robert Wilkins also served on the three-judge panel. All three judges were appointed by President Barack Obama.
The decision therefore addresses both the data process and the government’s theory that courts could not examine it under the Administrative Procedure Act. The panel rejected that theory by treating the procedure as a final agency action with legal effects.
The IRS and the Department of Homeland Security did not respond to requests for comment.
Thousands of previously shared records remain tied to the case
The injunction does not erase the records already disclosed. The case includes the roughly 47,289 addresses that the IRS shared before the court stopped the process.
Roughly 43,000 taxpayers may need notification so they can seek damages for unlawful disclosure. The ruling thus reaches beyond the future exchange of information and into the handling of records already released.
The court’s reasoning places the burden on the government to meet the statutory disclosure conditions before using tax records for immigration enforcement. An agency cannot substitute an automated match for the required legal review.
This article provides general information and is not legal advice. Consult a qualified immigration attorney about your specific case.
