Second Court Blocks Tax Agency Data-Sharing With Immigration Enforcers

A federal judge reportedly dealt a significant blow to the current administration’s immigration enforcement efforts Thursday by blocking the country’s tax collection agency from providing residential addresses to immigration authorities.

District Judge Indira Talwani, who was appointed during a previous administration, argued that the data-sharing arrangement could allegedly violate privacy protections for taxpayers established under tax legislation from 1976. The judge’s order blocks both immigration enforcement and tax officials from sharing data while also prohibiting the use of information that had already been transferred, pending a court review.

“Defendants are enjoined from inspecting, viewing, using, copying, distributing, relying on, or otherwise acting upon any return information that had been obtained from or disclosed by the tax agency pursuant to the information sharing arrangements, including the information received August 7, 2025,” the judge’s order states, according to court documents.

Observers note that beyond concerns about taxpayers’ privacy, the judge addressed what critics describe as a potential chilling effect on tax filings by immigrants and the possibility that citizens could be wrongfully arrested due to mistaken identity. The ruling reportedly highlighted how “a significant portion of immigrant communities not only share common last names … but also live in shared homes or in the same apartment complexes,” adding to concerns about misidentification.

The plaintiffs in the case were four community advocacy groups challenging the administration’s information-sharing policy, which was established to support what officials describe as a federal crackdown on unauthorized immigration.

According to court records, the tax agency and immigration enforcement established a memorandum of understanding in April 2025 to share taxpayer data. Immigration officials subsequently issued three data requests, including an initial query for 7.6 million individuals, followed by requests for 7.3 million and 1.2 million records respectively. While the tax agency rejected the first two requests for alleged legal deficiencies, it approved the third and ultimately transferred over 47,000 addresses to immigration authorities in August 2025.

A spokesperson for the homeland security department criticized what they termed an “activist judge’s ruling,” stating that “under the current leader’s direction, the government is finally doing what it should have all along — sharing information across the federal government to solve problems.” The official added that the previous administration “not only allowed millions of illegal aliens to flood into our country, but lost them through incompetence and improper processing.”

The spokesperson argued that information sharing across agencies is reportedly “essential to identify who is in our country, including violent criminals; determine what public safety and terror threats may exist so we can neutralize them; scrub these individuals from voter rolls; and identify what public benefits these aliens are using at taxpayer expense.”

This marks the second judicial intervention blocking the tax-immigration information-sharing agreement, according to local media reports. The first ruling came from another federal district judge who similarly found that the arrangement violated taxpayer confidentiality laws. That judge had also reportedly blocked the treasury secretary and acting tax commissioner from disclosing taxpayer information to homeland security officials unless it was being transferred for non-tax criminal investigations.

The legal challenges highlight ongoing tensions between the current administration’s immigration enforcement priorities and judicial oversight of government data-sharing practices, observers note. The rulings come as the country continues to grapple with questions about balancing security concerns with privacy protections and civil liberties.