DHS Access to IRS Taxpayer Info Blocked in Federal Court (1)

A judge barred the IRS from sharing data on millions of American taxpayers with the Department of Homeland Security after determining that taxpayer and labor groups can challenge the practice.

Judge Colleen Kollar-Kotelly of the US District Court for the District of Columbia granted a preliminary injunction that the groups sought in response to DHS accessing data on large numbers of Americans. She further stayed the agreement signed between the IRS and Immigration and Customs Enforcement, which is part of DHS, that allowed information sharing.

The judge also ordered the IRS to inform the court in advance of any disclosures of taxpayer information it deems lawful.

According to the groups’ motion, the IRS began sharing information on thousands of taxpayers with US Immigration and Customs Enforcement Aug. 4, part of a new policy to share data with other agencies following the creation of the so-called Department of Government Efficiency. The IRS responded that it was complying with the taxpayer protections in IRC Section 6103, which blocks most information disclosures with exceptions for criminal investigation.

The groups—including the Center for Taxpayer Rights, Main Street Alliance, the National Federation of Federal Employees, and Communications Workers of America— sued in February, calling the information sharing a violation of the Tax Reform Act, the Privacy Act, and the Administrative Procedure Act.

The case pushes back against what the plaintiffs say is part of a larger effort to reshape and dismantle parts of the federal government. It’s one of a series of interrelated suits over access to private citizens’ data.

In a statement after the rulings, Democracy Forward Foundation, which represents the plaintiffs, praised the ruling as a control that assures privacy.

“The privacy laws enacted in the post-Watergate era exist to prevent abuses of power like this and yet leaders in the IRS and ICE launched this effort,” said Skye Perryman, president and CEO of Democracy Forward. “Paying your taxes does not forfeit your right to privacy.”

The IRS and DHS didn’t immediately comment.

The judge dismissed one count that asserted a non-statutory challenge to the action, but denied a government motion to dismiss the APA, tax code, and Privacy Act claims.

Kollar-Kotelly earlier denied an injunction for access to treasury payment systems.

The Washington-Baltimore News Guild, which is affiliated with the Communications Workers of America, represents employees of Bloomberg Law.

The case is Ctr. for Taxpayer Rights v. Internal Revenue Serv., D.D.C., No. 1:25-cv-00457, order 11/21/25.