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IRS Acting Chief Resigns Over Immigrant Tax Data Sharing Deal with ICE
WASHINGTON, D.C. – The acting commissioner of the Internal Revenue Service (IRS) is reportedly stepping down in response to an accord to share immigrant tax information with Immigration and Customs Enforcement (ICE). This data exchange aims to assist in identifying and deporting individuals residing in the U.S. without legal authorization, according to sources familiar with the decision.
Resignation Follows Data-Sharing Agreement
Melanie Krause, who has served as acting head of the IRS since February, will resign following the recent data-sharing document. The agreement, finalized on Monday, was signed by Treasury Secretary Scott Bessent and Homeland Security Secretary Kristi Noem. It authorizes ICE to provide names and addresses of immigrants residing in the U.S. illegally to the IRS for verification against tax records.
Sources with direct knowledge of the matter have confirmed Krause’s impending resignation to The Associated Press, speaking anonymously due to lack of authorization to discuss the matter publicly.
Upheaval at IRS Over Data Sharing Policies
The IRS has experienced internal disruption regarding the current administration’s decisions to share taxpayer information. Former Acting Commissioner Douglas O’Donnell retired in February after approximately 40 years at the agency. His departure occurred amidst controversy surrounding the Department of Government Efficiency’s (DOGE) access to IRS taxpayer data, linked to Elon Musk. Krause succeeded O’Donnell as acting commissioner.
Additionally, acting chief counsel William Paul was removed from his position last month and replaced by Andrew De Mello. De Mello, an attorney within the chief counsel’s office, is reportedly supportive of DOGE, according to undisclosed sources.
Administration Defends Agreement as Border Security Measure
The Treasury Department asserts that the agreement is crucial for enacting President Donald Trump’s agenda to strengthen U.S. borders. They characterize it as part of a broader national immigration enforcement initiative, which has included deportations, workplace raids, and the utilization of an 18th-century wartime statute to deport Venezuelan migrants.
Privacy Advocates Condemn Information Sharing
However, advocacy groups contend that the IRS-DHS information-sharing agreement infringes upon privacy laws, eroding the privacy of all Americans.
Treasury Official Cites Existing Legal Authority
According to a Treasury official, who requested anonymity to explain the agency’s perspective, the agreement is based on “longstanding authorities granted by Congress.” These authorities are intended to “protect the privacy of law-abiding Americans while streamlining the ability to pursue criminals.”
Concerns Over Tax Compliance and Privacy Precedent
Tom Bowman, policy counsel for the Center for Democracy and Technology, argues that disclosing immigrant tax records to DHS for immigration enforcement will negatively impact tax compliance within immigrant communities. He suggests this will reduce contributions to essential public programs and increase burdens on U.S. citizens and nonimmigrant taxpayers. Bowman also warns that the agreement establishes a “dangerous precedent for data privacy abuse in other federal programs.”
ICE Defends Agreement as Tool Against Criminal Activity
Todd Lyons, acting ICE director, indicated to reporters at the Border Security Expo in Phoenix on Tuesday that the agreement would assist ICE in identifying individuals who are improperly collecting benefits and are “kind of hiding in plain sight” using fraudulent identities.
Lyons stated that collaboration with Treasury and other departments is “strictly for major criminal cases.”
Prior IRS Involvement in Immigration Enforcement
The IRS had already been requested to aid with immigration enforcement earlier in the year.
Secretary Noem reportedly sent a request to Secretary Bessent in February to temporarily assign IRS Criminal Investigation personnel to assist with immigration enforcement efforts, according to an obtained letter. The request referenced the IRS’s increased funding, although a significant portion of the $80 billion allocated to the agency under the Inflation Reduction Act has been rescinded.
Legal Experts Raise Concerns of Privacy Violations
A group of tax law experts from the NYU Tax Law Center issued a statement on Monday arguing that the IRS-DHS agreement “threatens to violate the rights that many more Americans have under longstanding laws that protect their tax information from wrongful disclosure or dissemination.”
The experts added, “In fact, it is difficult to see how the IRS could release information to DHS while complying with taxpayer privacy statutes. IRS officials who approve data sharing under these circumstances risk violating the law, potentially leading to criminal and civil penalties.”
Privacy Safeguards Stated in Memo
The memo outlining the agreement asserts that the IRS and ICE “will perform their duties in a manner that recognizes and enhances individuals’ right of privacy and will ensure their activities are consistent with laws, regulations, and good administrative practices.”