Since April 2025, there is ongoing uncertainty surrounding the agreement between ICE (Immigration and Customs Enforcement) and the IRS to share taxpayer information, particularly that of individuals filing with an ITIN. Under this new agreement, the ICE can request taxpayer information—including names, addresses, and tax years—from the IRS under the narrow confidentiality exception in Section 6103(i)(2).  This agreement represents a significant departure from decades of IRS policy that strictly protected ITIN‑filers and other taxpayers from immigration enforcement use of their tax data. As you have seen in the news over the last few months, senior IRS officials, including the acting commissioner and chief privacy officers, resigned in protest, citing concerns that the MOU likely violates taxpayer privacy laws and undermines trust in the tax system. Critics warn this could discourage undocumented immigrants from filing taxes—potentially costing up to hundreds of billions in federal revenue—and set a dangerous precedent for broader government data‑sharing and enforcement actions. Legal challenges are ongoing as advocates argue the agreement stretches beyond safe legal limits and threatens civil liberties and public trust in tax confidentiality. This ambiguity leaves many ITIN filers uncertain about how their tax information may be used, reinforcing the importance of staying informed and seeking guidance from qualified professionals. Based on our experience, filing tax returns while being undocumented in the U.S. can have several benefits, including:

  1. Proof of Residency – Filing taxes can help establish a record of continuous presence in the U.S., which may be useful for future immigration relief or applications.
  2. Pathway to Legalization – If immigration laws change or a future legalization program requires proof of good moral character and financial responsibility, tax records can serve as evidence.
  3. Claiming Refunds & Credits – If eligible, you may receive refunds for overpaid taxes or claim certain tax credits (though some, like the Earned Income Tax Credit, are limited to those with valid Social Security numbers).
  4. Compliance with the Law – Even undocumented workers are required to pay taxes on their income. Filing can demonstrate responsibility and adherence to U.S. tax laws.
  5. Avoiding Penalties & Interest – If you don’t file and owe taxes, penalties and interest may accumulate over time. Filing on time helps avoid these additional costs.
  6. Supporting a Future Immigration Case – Some immigration relief programs (such as cancellation of removal or adjustment of status) may require proof of good moral character and tax compliance.
  7. Building Credit & Financial History – Tax returns can be used as proof of income when applying for loans, mortgages, or even rental agreements.
  8. Social Security & Medicare Contributions – Although undocumented immigrants generally cannot claim Social Security benefits, paying into the system may be beneficial if they later obtain legal status.

To file taxes, undocumented individuals can apply for an Individual Taxpayer Identification Number (ITIN) using the w7 form through the IRS, which allows them to report income and pay taxes without a Social Security number. For further information on how this development may affect you or someone you know, we encourage you to reach out to our team of experienced tax professionals. We’re here to provide clarity, guidance, and support—whether you’re filing with an ITIN, navigating immigration-related tax concerns, or simply seeking to stay compliant and protected under evolving regulations. Link Economic Policy Institute  – ICE and IRS reach agreement to share taxpayer information of suspected undocumented immigrants Link Tax Policy Center – The New ICE-IRS Data Sharing Agreement Has Three Problems