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The acting commissioner of the Internal Revenue Service (IRS) is expected to step down following the agency’s announcement that it will share tax information of immigrants with Immigration and Customs Enforcement (ICE) as part of efforts to identify and deport undocumented individuals.
Melanie Krause is reportedly resigning due to disagreements with the Treasury Department about this decision to share taxpayer data with the Department of Homeland Security (DHS), as indicated by a source close to the matter and a statement from the Treasury. A spokesperson for the Treasury acknowledged Krause’s leadership during a period marked by significant transformation within the IRS, emphasizing ongoing initiatives aimed at modernizing IT systems and improving taxpayer service while tackling issues like fraud and criminal activity.
According to CBS News, Krause intends to resign after enrolling in the IRS’s recently introduced Deferred Resignation Program. The Washington Post was the first to report on her forthcoming departure.
Earlier this week, the IRS revealed a memorandum of understanding with DHS in a court document associated with a lawsuit filed by Public Citizen, which seeks to restrict the Treasury from sharing tax return information with immigration enforcement entities.
The memorandum indicates that the IRS will scrutinize all requests related to this information-sharing agreement. Although portions of the document are heavily redacted, it discloses that the IRS will provide ICE with the names and addresses of immigrants, among other data points.
This new framework for data sharing enables ICE to cross-reference the identities of undocumented individuals in the U.S. with their IRS tax filings.
The Treasury Department asserts that this move supports President Trump’s agenda to enhance border security and is an element of his broader immigration enforcement strategy, which has involved increased deportations and proactive measures such as workplace raids and invoking the Alien Enemies Act against Venezuelan migrants.
Critics argue that the IRS-DHS agreement undermines established privacy protections and threatens the confidentiality of all American taxpayers. A Treasury official, speaking on the condition of anonymity, defended the agreement by referencing “longstanding authorities granted by Congress,” which are intended to safeguard the privacy of lawful citizens while enabling effective law enforcement against criminal activities.
Todd Lyons, the acting director of ICE, stated at a recent industry event that the arrangement would assist in identifying individuals fraudulently obtaining benefits while using another person’s identity. He clarified that collaboration with the Treasury and other agencies is limited to serious criminal investigations.
Earlier this year, the IRS was asked to assist with immigration enforcement when South Dakota Governor Kristi Noem sought IRS Criminal Investigation resources to bolster ICE’s immigration initiatives. This request highlighted the IRS’s increased funding, although the significant financial boost under the Democrats’ Inflation Reduction Act has faced subsequent reductions.
Experts at the NYU Tax Law Center have warned that this agreement poses a risk of violating the privacy rights of numerous Americans under existing laws protecting tax information from unauthorized disclosure. They raised concerns about the potential legal ramifications for IRS officials involved in authorizing data sharing under these conditions, warning that such actions could lead to both civil and criminal penalties.
The memorandum states that both the IRS and ICE are committed to conducting their activities in a manner that enhances individuals’ privacy rights and adheres to applicable laws and regulations.
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