By Richard Rubin

WASHINGTON -- Newly disclosed documents show how immigration officials pressed the Internal Revenue Service earlier this year for quick, expansive disclosures of sensitive taxpayer information such as bank names and employers as the government pursued mass deportations -- and how the IRS pushed back.

The requests from Immigration and Customs Enforcement triggered months of angst, executive departures and legal debates inside the IRS. The ICE efforts to obtain taxpayer information were reported earlier this year and spurred objections from taxpayer-privacy advocates and Democrats. The documents filed in federal court this week shed new light on months of back-and-forth talks among government officials.

The tax agency moved from flat rejection of February's broad requests to a much narrower August disclosure. The IRS found more than 47,000 matches of name-and-address information from a list of 1.3 million provided by ICE. Immigration authorities haven't said whether or how they are using that information, but up-to-date tax records could help them more easily locate people who have stayed in the country despite deportation orders.

Federal courts are reviewing the IRS actions to determine whether the agency complied with taxpayer privacy laws and other requirements. Partially redacted documents released in one case in U.S. District Court in the District of Columbia show the tension within the government as the Trump administration tried to break down the typical barriers between agencies and legal restrictions on data sharing.

The paper trail starts in mid-February, with IRS Criminal Investigation Chief Guy Ficco alerting senior executives to a call that his chief of staff had received from ICE. The immigration agency, Ficco wrote, was seeking taxpayer information to help locate 700,000 people who were subject to final orders of removal from the U.S.

For decades, the IRS had been encouraging undocumented immigrants to file tax returns to boost tax compliance. The IRS assured people that it wouldn't share that information with immigration authorities. Section 6103 of the tax code protects taxpayers' privacy with criminal penalties for IRS employees who make unauthorized disclosures. It contains limited exceptions.

The Trump administration, which came into office promising mass deportations, changed the longstanding IRS posture, prioritizing data sharing across agencies and immigration enforcement over those tax compliance goals.

After Ficco's staff told ICE that the IRS couldn't comply with the request, an ICE official said the issue would be elevated to the National Security Council, according to the documents. Within three days, then-acting IRS Chief Counsel William Paul wrote a legal memo concluding that the sweeping disclosures ICE wanted weren't allowed.

That memo highlighted multiple problems. For one, it said, immigration actions are typically civil, not criminal, so they wouldn't qualify for one of the key exceptions to taxpayer privacy. Second, certain requests to the IRS must include a taxpayer address.

"In short, based on our current understanding of the facts, section 6103 would not permit IRS to disclose the address information sought by ICE to supplement its removal enforcement packages," Paul wrote.

His February objections pointed the path toward the eventual narrower disclosure.

In the moment, ICE officials were undeterred, according to the documents. In a Feb. 22 email to Treasury officials, an ICE official, Caleb Vitello, detailed the information that the agency wanted for each person on its list of 700,000. ICE sought taxpayers' employers, IP addresses, identification numbers, bank names, known relatives, aliases, phone numbers and emails.

"We would like to have this data within two weeks," Vitello wrote.

Getting even a small fraction of what ICE wanted took more than five months.

The internal debate over the ICE request happened during unusual turnover at the top of the IRS.

In March, Paul was pushed aside as acting chief counsel. Acting IRS Commissioner Douglas O'Donnell retired in late February, just after the first ICE requests. His successor, Melanie Krause, resigned as the IRS-ICE talks continued. The tax agency's chief privacy officer, chief risk officer, chief financial officer and others all left.

By early April, IRS and ICE had reached a far narrower agreement in a memorandum. ICE would focus its requests on people who were subject to criminal prosecution, because they had stayed in the U.S. more than 90 days after a removal order. ICE would send lists of names and addresses, and the IRS would indicate whether its systems had exact matches for each person on the list.

That isn't how this authority had been used before. The IRS-ICE agreement led to legal challenges, including from the Center for Taxpayer Rights, which brought the lawsuit that led to this week's disclosures.

"That exception, which allows the IRS to provide information for specific criminal investigations and proceedings, does not apply to the IRS's bulk disclosure of sensitive information, and ICE's request failed on its face to comply with the laws protecting taxpayer confidentiality, " lawyers for the center wrote in a court filing. "It is entirely implausible that ICE is conducting bona fide criminal investigations of over 1 million people."

The April agreement didn't lead to a quick transfer. IRS and ICE had to work out technical and legal details of file sharing. According to the documents, IRS and Treasury officials pushed back against ICE files that didn't contain all of the required information for each person, such as an address and specified tax years.

As late as June 25, the IRS's acting top lawyer was pointing out multiple shortcomings in an ICE request for 7.3 million records. That request, wrote Andrew De Mello, didn't explain why the information was relevant to a criminal proceeding and didn't include statements from ICE confirming that it wouldn't be used for other purposes.

"Unfortunately," he wrote, "the IRS is again unable to process this data file in accordance with the" IRS-ICE agreement.

Once ICE complied with those requirements with a request for 1.3 million records, it took another month for the IRS to test and transmit the data. The IRS found matches in fewer than 4% of cases -- just 47,289.

By this point, De Mello had been replaced as acting IRS chief counsel by Kenneth Kies, who advised then-IRS Commissioner Billy Long to approve the transfer to ICE.

"There is no need for a press release or broad disclosure of the fact that this information is being provided," Kies wrote to Long on Aug. 6.

Long, who had a rocky two-month stint atop the IRS, approved the data transfer Aug. 7. The following day, President Trump removed him as IRS commissioner.

Write to Richard Rubin at richard.rubin@wsj.com

(END) Dow Jones Newswires

October 30, 2025 18:39 ET (22:39 GMT)

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