On April 7, 2025, The Internal Revenue Service (“IRS”) and U.S. Immigration and Customs Enforcement (“ICE”) reached an agreement to share tax information between the agencies about some foreign nationals without legal status in the US. The terms of the agreement were made public by the publishing of the Memorandum of Understanding (“MOU”) in connection with a case brought by an immigrants’ rights groups challenging the validity of the data sharing between the agencies. Under the agreement, ICE officers may inquire to the IRS for information about foreign nationals who “have been issued final orders of removal or are under criminal investigation.” The agreement is unprecedented and has understandably raised concerns among the foreign national community, especially undocumented individuals or those with pending immigration matters. Below is a summary of what we need to know.
What Is The Scope of the Agreement?
The agreement between the IRS and ICE is a “fundamental departure from decades of practice” at the IRS which historically has kept information submitted by undocumented foreign nationals confidential. According to reports, ICE, in its requests to the IRS will be obliged to submit the name and address of the taxpayer, which federal criminal statute the person is being investigated for, and why disclosing the tax information would be relevant to the criminal proceeding. Fox News reported that the agreement will essentially allow ICE to cross-check names and addresses of undocumented immigrants with IRS tax records to get current address information from the tax agency.
Why It Matters for Foreign Nationals
For many foreign nationals, filing taxes—even without legal status—is a key part of showing good moral character, financial compliance, and long-term ties to the United States. Foreign nationals without legal status pay billions of dollars in taxes; those without a social security number file their taxes through a nine-digit code known as an Individual Taxpayer Identification Number (“ITIN”). The tax system has historically operated independently of immigration enforcement, and the IRS has consistently “assured undocumented taxpayers that their information is confidential, and that it would be safe for them to file tax returns.” The data-sharing approved by the MOU raises uncomfortable questions about whether that protection is as strong as many believed. Foreign nationals who have filed taxes using ITINs or who are unsure how their information is being used may feel less secure, especially if they or their family members are in removal proceedings, applying for relief, or living in mixed-status households.
What Should You Do Now?
First, it’s important not to panic. Filing taxes remains a critical part of building an immigration record and protecting future eligibility for benefits like cancellation of removal, adjustment of status, or deferred action. Speak with a financial advisor and an immigration lawyer to understand your risks. Finally, the agreement may spur congressional or administrative review. Whether it results in new guidelines or oversight remains to be seen. For now, we’ll be watching closely.
Conclusion
Foreign nationals have long participated in the tax system as a gesture of compliance, community contribution, and future opportunity. Any policy that undermines trust in that system risks unintended consequences; not just for the individuals involved, but for the integrity of both the tax and immigration processes. At DLG, we will continue to monitor these developments and provide the guidance our clients need to stay informed and protected.