A federal judge in Washington, D.C., has ruled that the IRS violated internal rules approximately 42,695 times by disclosing confidential taxpayer addresses to Immigration and Customs Enforcement without proper verification. The decision stems from a lawsuit filed by a nonprofit and two unions challenging data-sharing practices under the Trump administration. The ruling highlights procedural lapses in over 47,000 requests from ICE.
In a 13-page memorandum opinion issued on Thursday, U.S. District Judge Colleen Kollar-Kotelly, a Bill Clinton appointee, determined that the Internal Revenue Service likely committed several violations of the Internal Revenue Code. The case originated from a February 2025 lawsuit by the Center for Taxpayer Rights and two unions, amid the Department of Government Efficiency's efforts to access sensitive information systems and restructure federal agencies.
The dispute centers on ICE's use of the IRS's TIN Matching process to obtain taxpayer addresses. Under the IRC, requests for tax return data must include each taxpayer's name and address. However, in over 47,000 requests, ICE frequently failed to provide complete or sufficient addresses, relying instead on taxpayer identification numbers and names. Despite this, the IRS disclosed the last known addresses, leading to the violations.
Kollar-Kotelly detailed specific deficiencies, such as ICE submissions indicating 'Failed to Provide,' 'Unknown Address,' or 'NA NA,' or omitting street names and numbers. In some cases, addresses referred to jails or detention facilities. The judge noted that the IRS failed to verify these requests, even providing data for patently deficient ones. To illustrate, the opinion offered a hypothetical: ICE could submit an address like 'Don't Care 12345' or '00000' and still receive taxpayer information.
The ruling comes as a broader data-sharing arrangement between ICE and the Department of Government Efficiency remains paused since late November 2025, with an appeal pending before the U.S. Court of Appeals for the D.C. Circuit. Due to the ongoing appeal, the district court lacks jurisdiction for further relief but issued an indicative ruling.
Plaintiffs seek expedited discovery to supplement the administrative record, arguing that the IRS's own admissions warrant it. The government contended that Administrative Procedure Act cases typically rely on the existing record without additional discovery. Kollar-Kotelly found that the request 'raises a substantial issue' and could apply an exception, but deferred a formal decision pending the appeals court's input.
