IRS official resigns after agreement to share immigrant tax information with ICE – JURIST
The Internal Revenue Service (IRS)—the US federal service responsible for collecting taxes for the government—acting commissioner Melanie Krause resigned on Tuesday over a new Trump administration agreement that allows the IRS to send immigrants’ tax information to the US Immigration and Customs Enforcement (ICE).
On Monday, the Department of Treasury (TREAS) and the Department of Homeland Security (DHS) created a Memorandum of Understanding “for the exchange of information for non-tax criminal enforcement.” The agreement seeks to share immigrant taxpayer data with ICE, which is the agency tasked with enforcing DHS immigration policies. The agreement will enable ICE to request immigrants’ personal identifying information under the authority of a judge-issued removal order to cross-verify the person’s identifying information with their tax information under 26 U.S.C. § 6103(i)(2).
The agreement was formed under Executive Order 14161, which President Trump brought into effect on January 20. The order directs the Secretary of State to implement advanced vetting and screening across government agencies to identify and remove undocumented immigrants for national security purposes.
Krause has served as the IRS acting commissioner since February. Two anonymous sources confirmed her resignation to news media outlet The Associated Press stating that Krause will now participate in the Deferred Resignation Program implemented by the Office of Personal Management. The program allows certain qualifying federal employees to resign with paid leave as part of the federal government’s effort to shrink the workforce and ensure that all employees align with the current the administration’s agenda.
A source close to Klause said, “[Klause] no longer feels like she’s in a position where she can impact the decision-making that’s happening … And [she believes] that some of the decisions that are being made now are things the IRS can never recover from.”
IRS disclosure laws generally prohibit the sharing and release of tax information, except under IRC Section 6103(i)(1) which provides that “pursuant to court order, return information may be shared with law enforcement agencies for investigation and prosecution of non-tax criminal laws.” However, there are additional statutory protections against political interference with the IRS. 26 US Code, Section 7217 prohibits the executive branch from requesting information from the IRS of any individual taxpayer. Similarly, the Tax Law Center at NYU states that violating these statutes is considered a crime, which may be punishable by fine or imprisonment.
ICE Director Todd Lyons told reporters that the new agreement will help ICE to locate immigrants who are “kind of hiding in plain sight,” and accessing benefits they aren’t entitled to, and re-assured reporters that the deal will be used “strictly for the major criminal cases.”
The IRS has historically encouraged undocumented immigrants to comply with federal tax requirements, and has kept their information confidential. Tom Bowman, policy counsel for the Center for Democracy and Technology, warned that this initiative “will discourage tax compliance among immigrant communities, weaken contributions to essential public programs, and increase burdens for U.S. citizens and nonimmigrant taxpayers.” He continued, “It also sets a dangerous precedent for data privacy abuse in other federal programs.”
Chief Privacy Officer Kathleen Walters is one among other IRS officials preparing to resign.
