IRS improperly shared taxpayer data with DHS

The Internal Revenue Service improperly disclosed confidential taxpayer information on immigrants to the Department of Homeland Security.

The IRS had acknowledged sharing some of the information with DHS's Immigration and Customs Enforcement unit last year in court filings in response to a lawsuit over the Trump administration's push to deport immigrants. Last April, the IRS agreed to provide the names and addresses of individuals believed to be living in the U.S. illegally. The IRS provided information on approximately 47,000 taxpayers after DHS requested information on 1.2 million people before federal courts blocked the move, according to the Washington Post. Employees of Elon Musk's Department of Government Efficiency provided access to the confidential taxpayer information, despite safeguards under federal law, leading to the departures of high-level IRS officials last year, including acting commissioner Melanie Krause. However, the IRS has reportedly now discovered it inadvertently shared more confidential information than that on thousands of taxpayers with DHS. The IRS did not immediately respond to a request for comment. 

"The Trump Administration just committed a grave crime against taxpayers, clearly showing why data sharing among agencies is not something to be undertaken lightly," said Rep. Richard Neal, D-Massachusetts, the top Democrat on the tax-writing House Ways and Means Committee, in a statement Wednesday. "Privacy is next to liberty in American values, and while the Trump Administration wants to claim this was an accident, we know this was their goal. They have no intent of following our laws, and they have made it clear that they don't respect the humanity of their neighbors — it's the hallmark of their agenda."

A group of Senate Democrats wrote a letter last month to acting IRS commissioner and Treasury Secretary Scott Bessent seeking more information on the sharing of taxpayer information with DHS. 

The IRS and DHS have been facing lawsuits over the sharing of such information. In March 2025, Public Citizen Litigation Group, Alan Morrison and Raise the Floor Alliance filed a lawsuit against Trump Administration officials to stop the IRS from implementing a data-sharing deal that would give immigration enforcement authorities access to confidential taxpayer information. That case is currently on appeal in the D.C. Circuit Court of Appeals. Two other federal courts have preliminarily concluded that the IRS and DHS acted unlawfully in sharing taxpayer address information and have enjoined the practice. 

"This breach of confidential information was part of the reason we filed our lawsuit in the first place," said Public Citizen co-president Lisa Gilbert in a statement Wednesday. "Sharing this private taxpayer data creates chaos and as we've seen this past year, if federal agents use this private information to track down individuals, it can endanger lives."

Late last month, President Trump sued the IRS and the Treasury Department for $10 billion for the leak of his tax returns to The New York Times by a Booz Allen Hamilton contractor named Charles Littlejohn, who was sentenced to five years in prison in January 2024. 

Democrats compared the situation to the leaking of immigrants' confidential tax information. 

"If the president can sue the IRS for $10 billion over the disclosure of his information, these victims should too," said Neal. "I would expect to see my Republican counterparts approach the wrongdoing of those at the IRS or DHS who were involved in these illegal disclosures with the same vigor that they applied to those responsible for the illegal disclosure of President Trump's tax returns. We will see if we hear anything but the familiar sound of crickets chirping out of their corner. Acting Commissioner Bessent sure has a lot of explaining to do, and Chairman [Jason] Smith must immediately bring him before the Committee, as well as join Ways and Means Democrats in not only referring this matter to TIGTA but also opening a committee investigation."

On Tuesday, Sen. Ron Wyden, D-Oregon, the top Democrat on the Senate Finance Committee, introduced a bill called the Stop Presidential Embezzlement Act with Senate Minority Leader Chuck Schumer, D-New York, that would tax Trump on any financial benefit he might earn from his lawsuit against the Treasury and the IRS. Trump has pledged to donate any of the money he receives to charity.

"Saying that Trump's lawsuit against his own government creates a conflict of interest does not begin to describe the depth of corruption behind what he's doing," Wyden said in a statement Wednesday. "At a time when so many American families are struggling to get by, it's a shameful abuse of office for Trump to put himself in line to pocket billions of taxpayer dollars. The only reason Trump is talking about donating this money is because even he realizes what he's doing is indefensible with the public, and given that he's a lifelong cheat and conman, there's no reason to trust he'd even follow through with the donation anyway. Odds are he'd find a way to profit from any settlement or throw it into some vanity project like his fancy ballroom, so Congress needs to shut it down immediately."