IRS can share US immigrants' tax data: How it may speed up deportations

US appeals court refuses to block tax data sharing as Trump team weighs new bank citizenship checks in wider immigration crackdown

A Washington DC federal court on Tuesday rejected a request from an immigrant rights group to temporarily block the Internal Revenue Service (IRS) from sharing certain taxpayer data that could make it easier to identify and deport people who are in the United States illegally.

 

“This opens up a ton of new doors for DHS to speed up deportations,” right-wing commentator Nick Sortor wrote on X on Wednesday.

 

A three-judge panel of the US Court of Appeals for the DC Circuit declined to issue a preliminary injunction for the immigrant rights group Centro de Trabajadores Unidos and other nonprofits that are suing the federal government over the data-sharing agreement signed last April by Treasury Secretary Scott Bessent and Homeland Security Secretary Kristi Noem.

   

The agreement allows US Immigration and Customs Enforcement (ICE) to submit names and addresses of immigrants in the country illegally to the IRS for cross-verification against tax records.

 

Attorney General Pam Bondi described the ruling as a win for the administration. “Deporting illegal aliens makes the American people safer,” Bondi wrote in a social media post.

 

In Trump’s first year back in office, nearly 3 million illegal aliens have left the United States because of the administration’s immigration crackdown, according to data provided by the Department of Homeland Security (DHS). The figures include an estimated 2.2 million self-deportations and more than 675,000 deportations.

 

The Trump administration argued the agreement helps carry out President Donald Trump’s border enforcement agenda and forms part of a wider nationwide immigration crackdown that has included deportations and workplace raids.

 

The creation of the data-sharing agreement had drawn internal resistance, with the acting commissioner of the IRS resigning last year over the deal.

 

What new bank rule is under consideration?

 

Meanwhile, CNN reported, citing sources, that the Trump administration is weighing a new requirement for US banks to verify citizenship information of current and future customers as part of the president’s immigration crackdown.

 

The potential move, which could take the form of an executive order, has raised concern within the banking industry that institutions could be compelled to request a new category of documents from customers, including passports and other proof of citizenship.

 

Sources cautioned that the plans have not been finalised and that officials are still considering legal pathways and alternative options, according to CNN.

 

At present, banks must comply with anti-money-laundering and know-your-customer rules and record where a customer lives, but they do not collect or verify citizenship status.

 

If President Trump signs such an executive order, banks could be required to obtain citizenship information retroactively from existing customers and collect it from new clients, the report said.