WASHINGTON – As millions of Americans raced to meet the April 15th tax deadline, undocumented immigrants faced a different kind of pressure. They fear filing taxes could lead to their deportation.
The anxiety was heightened this year as a newly disclosed agreement between the Internal Revenue Service (IRS) and the Department of Homeland Security (DHS) revealed an arrangement that permits limited information sharing between the two departments, for national security purposes.
Immigration advocates warned the collaboration between the agencies was casting a chilling effect on tax compliance among undocumented filers.
“Within the Hispanic community, we have received many questions and concerns from undocumented clients,” said Donald Rojas, a tax representative at Ikon Insurance, who deals primarily with undocumented clients. “They are very concerned about this situation, as it directly affects their stability and access to important services,” he said.
More than 11 million undocumented immigrants live in the United States, and according to a recent analysis by the Institute on Taxation and Economic Policy, an estimated 6.1 million of them file federal, state, and local taxes each year. In 2022 alone, undocumented workers contributed over $96.7 billion to public coffers—with no access to most federal benefits, including Social Security, Medicare, or unemployment assistance.
The IRS has long maintained that Individual taxpayer identification numbers, ITIN’s data is protected and used solely for tax administration. In a statement, the agency emphasized that it “does not initiate immigration enforcement actions” and that the new DHS partnership is limited to threats deemed “critical to national security.” However, advocacy groups remain skeptical.
According to the newly disclosed memorandum, the IRS may now share taxpayer information with DHS “for the purpose of investigating and prosecuting crimes not related to tax administration”—a shift that advocates say opens the door to broader enforcement from DHS to persecute undocumented immigrants.
“This change is unprecedented,” said Marco Guzamn, senior analyst at the Institute on Taxation and Economic Policy.
“Not only is it a serious violation of public trust and privacy, but it will undoubtedly put billions of dollars in tax payments by immigrants at risk,” Guzman said.
The Institute on Taxation and Economic Policy warns that such policies not only harm immigrant communities but could also significantly reduce public revenues. They predict a $7.9 billion reduction in annual revenue for every 1 million undocumented people who exit the country, with $2.5 billion of that coming out of state and local budgets. ?
“If fear and misinformation increase, many people could stop filing, which not only affects the tax system but also the taxpayers themselves,” said Rojas.
According to the Treasury Inspector General, as of the end of 2022, there were more than 5.8 million active Individual taxpayer identification numbers, ITINs, and the IRS reported that almost 487,000 new ITINs were issued during the 2022 calendar year.
“This plan could force undocumented immigrants into more off-the-books work where employers are less likely to withhold income tax from paychecks,” Guzman said.
Tax Day served as a stark reminder of the contradictions embedded in the U.S. immigration system. Undocumented immigrants must pay taxes but remain excluded from the benefits those payments support, and now, they fear, paying taxes could expose them to new risks.
“They could lose benefits such as the ITIN, refunds, or the ability to demonstrate good tax history for future immigration processes,” said Rojas.