Since early February, the Trump Administration has been pressuring the Internal Revenue Service to support the deportation of undocumented immigrants. In April, court filings showed that the I.R.S. ultimately capitulated, signing a “Memorandum of Understanding” with Immigration and Customs Enforcement. Although the agreement was heavily redacted, an anonymous ICE official told Politico Pro that the “[I.R.S.’s] data would likely improve efficiency by helping ICE confirm addresses, streamlining time-consuming work that agents often have to do manually.” Immigration groups, including worker organization Centro de Trabajadores Unidos, sought a preliminary injunction against the data sharing. In mid-May, a federal judge denied the motion, reasoning that the MOU complied with the letter of the law. While immigration advocates have loudly criticized the data-sharing deal, labor and employment advocates should be concerned too because the immigrant taxpayers threatened by the deal are immigrant workers. 

The agreement puts undocumented workers in a double bind

For decades, the I.R.S. has encouraged undocumented workers to file taxes. The I.R.S. website still states that while individuals’ immigration statuses may vary, the tax laws look only at whether a taxpayer resides in the United States. In the past, the I.R.S. Commissioner has explicitly said that “We don’t enforce the Social Security laws, we don’t enforce the immigration laws…We treat it as taxpayer-protected information.” Historically, the I.R.S. has processed tax returns with false W-2 information like any other W-2, and it has not taken enforcement action when Social Security Numbers are flagged for mismatches or errors. Since 1996, the agency has also issued millions of Individual Taxpayer Identification Numbers (ITINs), which allow individuals ineligible for a Social Security Number to comply with tax laws. ITINs can also allow workers to start their own business.

Many undocumented workers believe that compliance with federal tax laws helps demonstrate “good moral character” and their desire to contribute the country if they have the chance to obtain legal status. On the contrary, avoiding tax obligations can count against that character requirement. In 2022, undocumented immigrants using ITINs reportedly paid $96.7 billion in state, local, and federal taxes. Over $31 billion went to Social Security and Medicare, two programs that undocumented immigrants are barred from accessing. 

The new I.R.S.-ICE agreement rests on a shaky re-interpretation of a section of the Internal Revenue Code—26 U.S.C. § 6103. Under Section 6103, taxpayer information must be kept confidential and may not be disclosed even to other federal agencies and officers, with limited exceptions. The new agreement relies on Section 6103(i)(2), which allows the I.R.S. to disclose taxpayer identity information to officers of a federal agency “who are personally and directly engaged in” an active criminal investigation or proceeding. In denying CTU’s request for a preliminary injunction, the district court pointed to the text of the MOU, which technically limits data sharing to criminal investigations. “On this limited record,” the district court refused to “assume that DHS intends to use the shared information to facilitate civil rather than criminal proceedings.” But ICE officials have reportedly told their I.R.S. counterparts that they hope to use the data to deport as many as 7 million people—despite the fact that immigration proceedings generally do not count as criminal investigations, and DHS could not plausibly investigate all 7 million individuals. Moreover, Section 6103(i)(2) requires the requesting agency to already have the taxpayer’s address information. It does not contemplate the agency’s provision or confirmation of addresses—especially not en masse. 

In any case, the I.R.S. deal puts undocumented workers in a double bind. If they choose to file taxes, they risk having ICE easily access their personal information. If they do not—and the I.R.S. confirms the lack of a return—ICE could cite violation of the tax laws as an additional reason to go after immigrants, even though tax violations in and of themselves are not a deportable offense. Moreover, the agreement will likely drive undocumented workers to take even riskier jobs in the underground economy. Workers in these jobs routinely face financial exploitation, wage theft, and working conditions that can range from unsafe to deadly.

Breaking down the “good immigrant, bad immigrant” binary 

The very identity of being a worker has historically been used as a wedge to divide immigrants. Even many undocumented workers themselves believe that those who “play by the rules” and contribute to the economy deserve to remain in the United States, while “bad” immigrants who commit crimes must leave. In a recent New York Timesinterview with two undocumented workers, one Mexican immigrant worried that “innocent people, people who pay taxes, who work” would be deported because of “other people’s fault.” Progressives and immigration advocates often justify support for “good” immigrants based on their identity as laborers, the needs of the economy, and how their taxpayer contributions support benefits for others, like Social Security.

In its recent public relations blitz, however, the White House has started to break down that false dichotomy, albeit by categorizing all immigrants as bad –  often referring to all undocumented immigrants as “criminals.” The I.R.S. deal—both by specifically targeting taxpayers who would have an I.R.S. return, and by seeking immigrant data through a provision focused on criminal investigations—only further underscores the deconstruction of immigrant workers as “good” immigrants. 

The deal is part of a broader hunt for data that threatens all of us

The IRS-ICE data deal is just one of multiple ways the Trump Administration has sought to use data to fulfill its goals. Around the same time, the Administration began canceling Social Security numbers that were lawfully obtained to prevent recent immigrants from working, accessing bank accounts, or receiving benefits. A whistleblower also recently detailed how DOGE staffers gained access to sensitive NLRB data, which could have included personal information on unions, union members, and employees related to ongoing legal cases. Meanwhile, DOGE has also sought to consolidatethe records of sensitive personal information, including social security numbers, employment history, and medical documentation, into a “central hub.” These efforts to manipulate and consolidate data recall the various ways that data has historically been used by the executive branch to target its enemies. 

In fact, the Tax Reform Act of 1976 mandated the confidentiality of tax return information—after the Nixon Administration tried to use the I.R.S. to go after its political enemies. At the time, White House counsel John Dean wanted to remake the agency, seeking to leverage its enforcement powers to further the administration’s political aims. Dean hoped the agency could “crack down” on “left wing political causes.” The White House also tried to install I.R.S. leadership who understood that “discreet political action and investigations are a firm requirement and responsibility.” President Nixon famously compiled an “enemies list” that included not just politicians, but also labor leaders, activists, and watchdog groups, and sought to have the I.R.S. harass, audit, and target these individuals for litigation and prosecution. 

There is evidence that the Trump Administration is not just randomly detaining immigrants, but has targeted immigrants involved in labor efforts. And the erosion of protections for confidential, personal information—whether immigrant taxpayer data or other workers’ sensitive health data—threatens workers everywhere. Unions have already brought suit against DOGE’s seizure of data at the Social Security Administration and have played a major part in movements standing up to the Trump Administration. As President Trump threatens to leverage data against not just undocumented workers, but all workers, unions can play a key role in shielding personal information—and people—from harm.