IRS acting commissioner is resigning over deal to send immigrants' tax
data to ICE, AP sources say
[April 09, 2025]
By FATIMA HUSSEIN
WASHINGTON (AP) — The acting commissioner of the Internal Revenue
Service is resigning over a deal to share immigrants' tax data with
Immigration and Customs Enforcement for the purpose of identifying and
deporting people illegally in the U.S., according to two people familiar
with the decision.
Melanie Krause, who had served as acting head since February, will step
down over the new data-sharing document signed Monday by Treasury
Secretary Scott Bessent and Homeland Security Secretary Kristi Noem. The
agreement will allow ICE to submit names and addresses of immigrants
inside the U.S. illegally to the IRS for cross-verification against tax
records.
Two people familiar with the situation confirmed Krause was resigning
and spoke to The Associated Press on condition of anonymity because they
were not authorized to discuss it publicly.
The IRS has been in upheaval over Trump administration decisions to
share taxpayer data. Acting Commissioner Douglas O’Donnell announced his
retirement from the agency after roughly 40 years of service in February
as furor spread over Elon Musk’s Department of Government Efficiency
gaining access to IRS taxpayer data. Krause replaced him.
Acting chief counsel William Paul was removed from his role at the
agency last month and replaced by Andrew De Mello, an attorney in the
chief counsel’s office who is deemed supportive of DOGE, according to
two other people familiar with the plans who were also not authorized to
speak publicly.
The Treasury Department says the agreement will help carry out President
Donald Trump’s agenda to secure U.S. borders and is part of his larger
nationwide immigration crackdown, which has resulted in deportations,
workplace raids and the use of an 18th century wartime law to deport
Venezuelan migrants.
Advocates, however, say the IRS-DHS information-sharing agreement
violates privacy laws and diminishes the privacy of all Americans.
The basis for the agreement is founded in “longstanding authorities
granted by Congress, which serve to protect the privacy of law-abiding
Americans while streamlining the ability to pursue criminals,” said a
Treasury official who spoke on the condition of anonymity to explain the
agency’s thinking on the agreement.
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Tom Bowman, policy counsel for the Center for Democracy and
Technology, said disclosing immigrant tax records to DHS for
immigration enforcement "will discourage tax compliance among
immigrant communities, weaken contributions to essential public
programs, and increase burdens for U.S. citizens and nonimmigrant
taxpayers. It also sets a dangerous precedent for data privacy abuse
in other federal programs.”
Todd Lyons, acting ICE director, told reporters at the Border
Security Expo in Phoenix on Tuesday that the agreement will help ICE
find people who are collecting benefits they aren’t entitled to and
are “kind of hiding in plain sight” using someone else’s identity.
Working with Treasury and other departments is “strictly for the
major criminal cases,” Lyons said.
The IRS had already been called upon to help with immigration
enforcement earlier this year.
Noem in February sent a request to Bessent to borrow IRS Criminal
Investigation workers to help with the immigration crackdown,
according to a letter obtained by the AP. It cites the IRS’ boost in
funding, though the $80 billion infusion of funds the federal tax
collection agency received under the Democrats’ Inflation Reduction
Act has already been clawed back.
A collection of tax law experts for the NYU Tax Law Center wrote
Monday 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.”
“In fact, it is difficult to see how the IRS could release
information to DHS while complying with taxpayer privacy statutes,”
they said. “IRS officials who sign off on data sharing under these
circumstances risk breaking the law, which could result in criminal
and civil sanctions.”
The memo states 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.”
___
Associated Press writer Elliot Spagat contributed to this report
from Phoenix.
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