(WASHINGTON, DC) A federal judge in the nation’s capital has temporarily blocked the IRS from sharing taxpayer address information with ICE, dealing a major setback to President Trump’s push to tap tax records for immigration enforcement. In a ruling issued November 21, 2025, U.S. District Judge Colleen Kollar-Kotelly said the tax agency’s new data-sharing deal with immigration authorities was likely unlawful and ordered the practice paused while a broader lawsuit moves forward.
The decision affects potentially more than a million “immigrant taxpayers” whose records were targeted under the agreement and raises fresh questions about privacy, due process, and the limits of federal power under the Administrative Procedure Act.
The memorandum and the scope of requests
At the center of the dispute is an April 2025 memorandum of understanding between the IRS and U.S. Immigration and Customs Enforcement that allowed immigration agents to request taxpayer address data for people under investigation.
Court filings say ICE initially sought information on more than 7 million taxpayers before narrowing the list to about 1.2 million individuals it labeled “immigrant taxpayers.” At least 47,000 records had already been turned over by the tax agency before the judge’s order.
These figures raised concern among advocates that confidential tax information was being folded into large-scale immigration enforcement efforts without clear legal limits or public debate.
Quick reference — numbers involved
| Item | Number |
|---|---|
| Initial taxpayer requests sought by ICE | 7 million+ |
| Narrowed list ICE targeted | ~1.2 million |
| Records already handed over before injunction | 47,000+ |
Judge’s legal reasoning
Judge Kollar-Kotelly, a Clinton appointee on the federal bench in Washington, found that the IRS had likely violated the Administrative Procedure Act (APA), the 1946 law that requires agencies to explain major policy shifts and avoid action that is “arbitrary and capricious.”
She wrote that the tax agency failed to give a reasoned explanation for reversing its long-standing stance of strict confidentiality for taxpayer information, particularly addresses, which can reveal where people live, work, and raise families. That failure, she said, made the data-sharing arrangement vulnerable under the APA and justified the temporary halt.
“The tax agency failed to give a reasoned explanation for reversing its long-standing stance of strict confidentiality,” the judge wrote, signaling that the agency’s change in practice lacked the necessary justification under the APA.
The judge also signaled doubt about the scope of ICE’s request. Although the agency claimed that all 1.2 million targeted cases involved people personally and directly engaged in criminal activity, Kollar-Kotelly called that sweeping assertion “suspicious” given the volume of records and lack of detail provided to the court.
Her skepticism echoed longstanding concerns from immigrant communities that broad information sweeps — even when framed as criminal investigations — can bring in large numbers of people whose only contact with the system is through civil immigration matters or routine tax filing.
Who sued and why
The lawsuit was brought by:
- Center for Taxpayer Rights
- Small-business network Main Street Alliance
- National Federation of Federal Employees
- Communications Workers of America (a major labor union)
These groups argued the data-sharing deal would:
- Scare off many immigrants from filing returns or seeking low-cost or free tax help, because people would fear the IRS had become an arm of immigration enforcement.
- Damage trust in the tax system and undercut overall tax compliance, since millions of workers without legal status still file returns every year — often using Individual Taxpayer Identification Numbers issued by the government.
Prior court action and immediate effects of the ruling
In an earlier order in September 2025, the same judge had required the IRS to give both the plaintiffs and the court 24 hours’ notice before sending large batches of taxpayer data to ICE.
The November 21, 2025 ruling goes further by temporarily blocking further transfers of addresses while the underlying legal challenge proceeds. The injunction:
- Leaves in place the records already shared,
- Freezes any expansion of the program,
- Signals the court sees serious legal problems with how the tax agency rolled out the arrangement without public rulemaking or clear explanation, as typically expected under the APA.
Broader context and arguments on both sides
The IRS has long promoted strict confidentiality as a pillar of the American tax system, arguing taxpayers are more willing to report income honestly if they trust their information will be used only for tax purposes.
Official guidance on tax confidentiality and privacy stresses that returns and return information are protected by law, with only narrow exceptions. See the IRS guidance here: https://www.irs.gov/privacy-disclosure/tax-confidentiality-and-privacy
According to analysis by VisaVerge.com, the Trump administration’s push to use civil tax data in support of immigration enforcement represented a sharp break from past practice and raised alarms among immigrant advocates and career tax professionals worried about damage to voluntary compliance.
Supporters of tighter cooperation between tax and immigration authorities argue that people who commit serious crimes should not be able to hide behind tax privacy rules. Civil rights lawyers counter that the April 2025 memorandum went far beyond targeted requests tied to specific criminal cases and instead opened the door to broad searches that could track where large groups of foreign-born taxpayers live.
They warn that, in mixed-status households where U.S. citizen children live with undocumented parents, address information shared by the IRS could help ICE locate entire families — even when only one person in the home was under investigation or suspected of a crime.
What comes next
The case now moves into a fuller phase of litigation. The plaintiffs will seek to prove that the IRS–ICE agreement:
- Violated the Administrative Procedure Act, and
- Ran counter to the tax code’s own confidentiality rules.
Government lawyers are expected to argue:
- The statute gives the tax agency some flexibility to share information with law enforcement, and
- The April 2025 memorandum fit within those existing powers.
For now, however, the judge’s order signals that courts may be less willing to accept sweeping data-sharing deals struck behind closed doors, especially when they touch both immigration enforcement and the fragile trust that keeps people filing their taxes.
Reactions and significance
- The IRS has not yet issued a public response to the ruling.
- ICE has also stayed silent, leaving taxpayers and advocates to guess how the agencies will adjust in the short term.
Legal scholars say the case could set a marker on:
- How far federal agencies may go when reinterpreting long-held privacy promises, and
- Whether the Administrative Procedure Act can check sudden shifts that link civil data systems to immigration crackdowns.
On November 21, 2025, a federal judge in D.C. temporarily blocked an IRS–ICE data-sharing memorandum, finding it likely violated the Administrative Procedure Act. ICE had sought over seven million taxpayer records, narrowed to about 1.2 million targeted “immigrant taxpayers,” and at least 47,000 addresses were already transferred. Plaintiffs argued the arrangement threatened tax confidentiality and could deter filings; the injunction halts further transfers while a broader legal challenge proceeds.
