Judge blocks IRS from sharing data with ICE

A federal judge ruled Friday that the IRS appears to have broken the law when it reached an agreement to share secret taxpayer data with ICE, and ordered a pause to the practice.

Judge Colleen Kollar-Kotelly, a Clinton appointee to the court in the District of Columbia, called the sharing “unlawful conduct” that broke procedural and tax law.

“Plaintiffs have shown that the IRS’s implementation of the Address-Sharing Policy was arbitrary and capricious because the IRS failed to recognize that it was departing from its prior policy of strict confidentiality, failed to consider the reliance interests that were engendered by its prior policy of strict confidentiality, and failed to provide a reasoned explanation for the new policy,” she wrote.

U.S. Immigration and Customs Enforcement had sought access to IRS data to help track down illegal immigrant targets.

According to documents revealed in the case, ICE initially sought information on more than 7 million IRS taxpayers, then settled on 1.28 million “immigrant taxpayers,” the judge said.

At least 47,000 records were provided, the judge said.

The IRS initially denied ICE’s request but decided to cooperate after the immigration agency narrowed its scope to the 1.28 million people and said they were being investigated for the criminal offense of remaining in the U.S. 90 days after they were ordered deported.

Criminal cases are allowed exceptions to the IRS’ close hold on its information.

Judge Kollar-Kotelly suggested that ICE’s claim was suspicious because the agency represented that one individual was “personally and directly engaged” in the 1.28 million investigations.

She said the IRS never provided a good reason for its decision to enter into the sharing agreement with ICE, which she said was a violation of the Administrative Procedure Act.

She said ICE’s given reason for wanting migrants’ addresses also was too weak to meet the standards in the law for when the IRS can disclose that information.

“ICE’s June 27 request failed to provide a specific reason or reasons why the taxpayer information it requested was relevant to the criminal investigations or proceedings it was conducting,” she wrote.

The Washington Times has sought comment from the IRS and ICE.

The lawsuit was brought by the Center for Taxpayer Rights, which said it feared some of its members’ data was being turned over to ICE.

The judge found that likely and said the center has seen a decrease in people seeking pro bono tax services, giving the outfit legal standing to sue.