Judge: IRS broke law ‘approximately 42,695 times’ in giving DHS data

A federal judge has found that the Internal Revenue Service violated federal law “approximately 42,695 times” when it shared confidential taxpayer addresses with immigration enforcement officials last summer.

U.S. District Judge Colleen Kollar-Kotelly issued the ruling Thursday as part of ongoing litigation over a data-sharing arrangement between the IRS and the Department of Homeland Security.

Federal law requires that before the IRS hands over a taxpayer’s address, a requesting agency must first provide the IRS with the name and address of the person it’s looking for. The requirement exists to ensure that the government can access confidential tax records only for individuals it has already specifically identified.

The ruling finds that DHS did not follow this law. The judge wrote that the vast majority of the nearly 47,300 taxpayer addresses the IRS shared with Immigration and Customs Enforcement in August were disclosed without the IRS confirming that ICE provided a valid address for the person whose records it was seeking.

“The IRS violated the [Internal Revenue Code] approximately 42,695 times by disclosing last known taxpayer addresses to ICE … without confirming that ICE’s request set forth the ‘address of the taxpayer with respect to whom the requested return information relate[d],’” the judge’s opinion stated.

The case is now before the U.S. Court of Appeals for the D.C. Circuit, where the government is appealing Kollar-Kotelly’s November order that blocked the data-sharing arrangement.

The Washington Post reported that the IRS had improperly shared confidential tax information of thousands of individuals with immigration enforcement officials. That report was confirmed by a subsequent court filing by Dottie A. Romo, the IRS’s chief risk and control officer.

DHS officials have defended the data-sharing agreement as necessary to crack down on illegal immigration.

“Information sharing across agencies is 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,” DHS said in a prior statement.

Taxpayer advocates have raised concerns about the data-sharing agreement since it began. Romo’s declaration stated that in thousands of cases, ICE’s requests contained addresses that were incomplete – featuring entries such as “Failed to Provide,” “Unknown Address,” or simply “NA NA.” In other cases, addresses were missing street names or street numbers. In still others, ICE listed jails, detention facilities or prisons as a taxpayer’s address without including the building’s street location.

In Thursday’s opinion, the judge used pointed language to describe the IRS’s verification standard. Under the government’s process, she wrote, ICE could have submitted a request with an address like “Don’t Care 12345” or simply “00000” and still received a taxpayer’s home address from the agency.

A Treasury Department spokesman did not return a request for comment.

“This confirms what we’ve been saying all along: that the IRS has an unlawful policy that violates the Internal Revenue Code’s protections by releasing these addresses in a way that violates the law’s requirements,” said Nina Olson, founder of the Center for Taxpayer Rights, which has sued the government over the disclosures.

Olson emphasized that there was no precedent to her knowledge of a judge finding tens of thousands of simultaneous violations of federal law regarding taxpayer confidentiality.

“I don’t know of any opinion about the IRS like this,” she added. “The kinds of mass requests that are coming in are unprecedented.”