Appeals Court Rules IRS Illegally Shared 47,000 Taxpayer Addresses With ICE

On September 8, 2026, the U.S. Court of Appeals for the D.C. Circuit upheld a district court injunction blocking the IRS from sharing taxpayer data with Immigration and Customs Enforcement. The panel found a procedure the agencies called the "Data-Exchange Procedure" violates 26 U.S.C. section 6103, the tax-confidentiality statute enacted after Watergate. Before the injunction took effect, the IRS had processed an ICE request covering 1.28 million taxpayers and returned more than 47,000 matching addresses. Judge Cornelia Pillard wrote that the IRS "failed to require ICE to provide a specific reason" for each request, and that ICE listed the same single contact person for every one of the 1.28 million requests.

The ruling reinforces a decades-old separation between tax administration and law enforcement that Congress built to preserve public trust in the tax system. By automating bulk disclosures without the individualized review the statute requires, the agencies had effectively converted IRS records into an immigration-enforcement database, exposing millions of taxpayers to disclosure without the safeguards Congress mandated.

The injunction remains in place while the underlying case, Center for Taxpayer Rights v. IRS, continues in district court. DHS said it disagrees with the ruling and will keep pursuing removals through "every lawful tool available."