Immigration and Customs Enforcement (ICE) asked the IRS to locate as many as 1.28 million people last year. In some requests, ICE did not supply the person’s actual address—the very information federal law required before the IRS could search confidential tax records for a newer address.
The IRS developed a workaround. If ICE entered any five- or nine-digit number in the address field, the request could proceed, even if the number was not a ZIP code.
Using the procedure, the IRS gave ICE access to 47,289 taxpayers’ last known addresses before a federal judge stopped it.
A unanimous federal appeals court ruled Tuesday that the IRS procedure violated federal law. The decision left the order blocking the IRS workaround in place.
The information was transferred under a 2025 agreement — signed by Treasury Secretary Scott Bessent and then-Homeland Security Secretary Kristi Noem — between the IRS and the Department of Homeland Security, which oversees ICE. The Trump administration said the information sharing helped immigration agents locate people suspected of living in the United States illegally.
Federal tax law permits the IRS to provide an address to another agency investigating certain crimes, but only after that agency meets several requirements, including supplying the person’s name and an address it already has for that person. ICE’s requests, the court determined, frequently lacked an address.
Some address fields instead contained entries such as “Failed to Provide,” “Unknown Address,” and “NA NA,” according to evidence described in the case. U.S. District Judge Colleen Kollar-Kotelly wrote in an earlier ruling that, under the workaround, ICE could have entered “Don’t Care 12345” or “00000” and still received a taxpayer’s actual address.
[NOTE: The IRS generally cannot disclose information taken from a tax return, including a taxpayer’s address, to another government agency. Congress tightened those protections after the Watergate scandal exposed political abuses of confidential tax information during the Nixon administration.]
The Center for Taxpayer Rights, Main Street Alliance, and other organizations sued the Treasury Department and IRS over the disclosures, arguing that people who filed tax returns did so with government assurances that their information would remain confidential. (Notably, President Trump sued the IRS for $10 billion this year after an IRS contractor leaked information about his tax returns.)
Kollar-Kotelly blocked the address-sharing policy in November 2025. She later found that the IRS had violated the tax code approximately 42,695 times while processing the ICE requests.
The administration appealed, arguing that the injunction interfered with federal law enforcement.
“But that’s a gripe with Congress, not the court,” Judge Cornelia Pillard wrote for the three-member panel of the U.S. Court of Appeals for the District of Columbia Circuit.
Pillard said the IRS had automated millions of searches without reviewing each request to determine whether it satisfied the legal requirements for releasing protected information. The most serious defect in the information sharing protocol, she wrote, was that ICE did not have to provide an actual taxpayer address.
[NOTE: A Department of Homeland Security spokesperson said the agency disagreed with the ruling and “will continue using every lawful tool available to locate and remove illegal aliens with final orders of removal.”]
Skye Perryman, president of Democracy Forward, which represented the challengers, said the post-Watergate privacy laws were enacted “to prevent abuses of power just like this.”
WIN: A federal appeals court blocked the IRS from disclosing a massive amount of taxpayers data to ICE.
The Trump-Vance admin’s dangerous data sharing policies violate the privacy rights of millions of Americans. The court has affirmed – yet again – that this behavior is… pic.twitter.com/YgTXu6TlzF
— Democracy Forward (@DemocracyFwd) September 8, 2026
The appeals-court ruling keeps the IRS policy blocked while the litigation continues. The administration can seek reconsideration from the full D.C. Circuit or ask the Supreme Court to intervene.