IRS acting commissioner resigning over Treasury’s plan to share immigrant tax data with ICE

The Acting Commissioner of the Internal Revenue Service, Melanie Krause, is expected to resign following the disclosure that the agency has agreed to share immigrants’ tax data with Immigration and Customs Enforcement (ICE) in order to assist in identifying and deporting undocumented immigrants. This decision has sparked controversy and led to Krause’s departure due to disagreement over the Treasury Department’s decision to share IRS taxpayer data with the Department of Homeland Security.

In a statement released by the Treasury Department, it was acknowledged that Krause has been instrumental in leading the IRS through a time of significant change, focusing on IT modernization and reorganizing the agency to better serve taxpayers. However, the decision to share tax data with DHS has created a rift in ideologies, leading to Krause’s resignation.

The IRS recently disclosed its memorandum of understanding with the Department of Homeland Security in response to a lawsuit filed by Public Citizen seeking to prevent the Treasury Department from disclosing tax return information to immigration enforcement authorities. The memorandum outlines the sharing of names, addresses, and other information of immigrants with ICE to aid in cross-verifying their status within the U.S. illegally.

While the Treasury Department argues that this data-sharing agreement aligns with President Trump’s agenda to secure U.S. borders and crack down on immigration violations, advocates have raised concerns about privacy violations and the potential impact on all Americans’ privacy rights. The agreement has been criticized for potentially violating longstanding privacy laws and compromising the confidentiality of taxpayer information.

Despite the controversy, Treasury officials defend the agreement, citing longstanding authorities granted by Congress to protect the privacy of law-abiding Americans while facilitating the pursuit of criminals. Acting ICE Director Todd Lyons also expressed support for the agreement, emphasizing its importance in identifying individuals who are exploiting benefits and using false identities.

However, tax law experts and advocates have raised red flags, warning that the agreement could potentially lead to legal violations and sanctions for IRS officials involved in data sharing. The memo between the IRS and ICE states a commitment to upholding individuals’ privacy rights and ensuring compliance with laws and regulations.

As the IRS and DHS navigate this data-sharing agreement, the resignation of Melanie Krause highlights the complexities and controversies surrounding the intersection of tax data, immigration enforcement, and privacy rights. This development underscores the importance of balancing national security interests with individual privacy protections in the digital age.

Contributors to this report include Aaron Navarro and Nicole Sganga.