The acting commissioner of the IRS, Melanie Krause, has resigned over a deal to share immigrant tax data with Immigration and Customs Enforcement (ICE) for identifying and deporting people in the U.S. illegally. This data-sharing agreement, signed by the Treasury Secretary and the Homeland Security Secretary, allows ICE to submit names and addresses of undocumented immigrants to the IRS for verification against tax records. Krause’s resignation comes amid turmoil in the IRS over Trump administration decisions to share taxpayer data, including Elon Musk’s Department of Government Efficiency gaining access to IRS data. Acting chief counsel William Paul was also removed from his role last month.
Advocates criticize the IRS-DHS data-sharing agreement, saying it violates privacy laws and undermines the privacy of all Americans. The Treasury Department defends the agreement, stating it helps carry out President Trump’s immigration crackdown agenda and that the information sharing complies with laws.
ICE Director Todd Lyons says the agreement will help locate immigrants committing fraud by receiving benefits illegally. However, experts warn that sharing immigrant tax records for immigration enforcement could discourage tax compliance and have negative implications for taxpayers.
The NYU Tax Law Center experts wrote that the IRS-DHS agreement may violate taxpayer privacy statutes and could result in legal consequences for IRS officials. The memo emphasizes the importance of upholding privacy rights and complying with laws in carrying out their duties.
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