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Federal Judge Blocks IRS From Sharing Taxpayer Data With ICE, Calls Policy 'Unlawful'

06:08 AM, 11/22/2025

A federal judge has blocked the IRS from sharing taxpayer information with ICE, calling the agency's Address-Sharing Policy likely unlawful in a 94-page ruling. The court found the disclosures likely violated the Administrative Procedure Act and multiple provisions of the Internal Revenue Code. The IRS reportedly provided data on nearly 47,000 taxpayers in early August. The order pauses the policy and preliminarily bars further tax data transfers to DHS except in narrowly court-approved circumstances.

A federal judge in Washington issued an order Friday blocking the Internal Revenue Service from sharing taxpayer information with U.S. Immigration and Customs Enforcement (ICE), ruling the practice unlawful.

In a 94-page opinion, U.S. District Judge Colleen Kollar-Kotelly found that plaintiffs showed a substantial likelihood that the IRS's adoption of its so-called Address-Sharing Policy and the agency's subsequent disclosure of taxpayer information to ICE were unlawful under the Administrative Procedure Act.

"The Plaintiffs have shown that the IRS’s disclosure of confidential taxpayer address information to ICE was contrary to law because it violated several provisions of the Internal Revenue Code," the judge wrote.

The order states that the IRS disclosed information about nearly 47,000 taxpayers to ICE in early August. It temporarily pauses the policy that enabled the sharing while the court continues its review and preliminarily enjoins the IRS, the Treasury Department and Treasury Secretary Scott Bessent from sharing tax return information with the Department of Homeland Security, with limited exceptions only allowed with judicial approval.

The Treasury Department and the IRS did not immediately respond to requests for comment.

Leadership and interagency data-sharing

The agency has seen several leadership changes this year, with six people serving in its top role; Scott Bessent is the latest acting commissioner after the removal of Billy Long in August. The ruling adds to broader debate inside the administration over data sharing: other federal agencies are also preparing or considering data transfers to support immigration enforcement. For example, the Department of Health and Human Services said in a memo that it intends to share information with ICE to help identify undocumented immigrants.

The court's order does not permanently prohibit all information sharing but restricts the IRS and Treasury from continuing the Address-Sharing Policy while the legal challenge proceeds and requires any limited disclosures to receive court approval.

What happens next: The case will continue in federal court as judges consider the merits of the plaintiffs' claims and whether the injunction should be made permanent. The decision signals judicial scrutiny of interagency data-sharing practices that affect taxpayer privacy and statutory protections under the Internal Revenue Code.

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