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The IRS arguably holds Americans’ most sensitive information, more so than any other federal agency, and for the better part of 2025, it quietly handed over that information, to the tune of about 47,000 records, to the Department of Homeland Security. This was done to aid in President Donald Trump’s deportation agenda, but that doesn’t mean it was legal: An appeals court this week found that the IRS violated federal law when it turned over the addresses of folks it deemed to lack permanent legal status. Now the agency and the employees who participated in the illicit information sharing could face civil and criminal consequences, including lawsuits from people who were deported after the IRS delivered their information to DHS.

The IRS is just one agency that got roped into cooperating with the Trump administration amid its immigration crackdown last year. Under normal circumstances, the IRS is forbidden from disclosing Americans’ tax information to anyone, including to other federal agencies and even within the executive branch, something Congress codified into federal law in the aftermath of Watergate. However, there are a few narrow exceptions, including active non-tax-related criminal investigations. This is where Trump’s DHS began scheming, crafting a memorandum of understanding that took advantage of a loophole in a federal statute. The memorandum stated that the IRS could provide undocumented taxpayers’ addresses because a person is technically subject to criminal investigation if they remain in the U.S. beyond 90 days after receiving a final order of removal. The MOU was so controversial it drove former Acting IRS Commissioner Melanie Krause, whom Trump appointed in early 2025, to resign in protest last April, alongside other top IRS leadership.

Nevertheless, (now) former Immigration and Customs Enforcement Director Todd Lyons wasted no time after the IRS deal was struck, requesting the last known addresses of 1.28 million undocumented individuals late that June. By July 1, the IRS was giving its employees the green light to process Lyons’ requests. However, according to the U.S. Court of Appeals for the District of Columbia Circuit, per federal law, that blanket request shouldn’t have been honored. Instead, ICE should have provided the IRS with specific information about its criminal investigations before the IRS shared any of its records, including the addresses DHS had on file for the specified individuals; however, that did not happen for more than 90 percent of DHS’s records requests. As the appeals court concluded, the IRS “never confirmed whether ICE request contained information plausibly reflecting ‘the name and address of the taxpayer.’ ” In fact, the judges suggested, ICE could have submitted requests with addresses like “ ‘Don’t Care 12345,’ or ‘00000,’ and still received a taxpayer’s address.”

That’s not all. If it had followed the law, ICE would........

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