D.C. Circuit Upholds Injunction Blocking IRS From Sharing Taxpayer Addresses With ICE

A Court Slows the Pipeline, But Doesn't Close It

The IRS holds one of the most reliable address lists the federal government has. People update it themselves, voluntarily, because they want their tax refunds to arrive^[16]. That is exactly why, in June 2025, then-acting ICE Director Todd Lyons asked the agency for the last known addresses of roughly 1.28 million people^[1][2]. The IRS ran the request and handed over 47,289 address records^[1][5].

On September 8, 2026, a three-judge panel of the U.S. Court of Appeals for the D.C. Circuit ruled that doing so likely broke the law. The panel was unanimous. It upheld a preliminary injunction, first issued by U.S. District Judge Colleen Kollar-Kotelly on November 21, 2025, that blocks the IRS from making more of these disclosures^[3][20]. The case is Center for Taxpayer Rights v. IRS^[20].

None of that reverses what already happened. The 47,289 records ICE already has stay in ICE's hands^[1][5]. What the ruling stops is the IRS doing it again, at least while the case continues.

The Law at the Center of the Fight

The dispute turns on a single statute: Section 6103 of the tax code, written after Watergate to keep the IRS from becoming a surveillance tool for the rest of the government^[2]. It generally bars the IRS from sharing tax-return information with other federal agencies. But it isn't absolute.

One provision, Section 6103(i)(2), lets a federal agency ask the IRS to confirm a taxpayer's identity, including an address, when that agency is investigating a non-tax federal crime^[16]. The Trump administration argues staying in the country after a final removal order, or reentering illegally, counts as exactly that kind of crime. On its reading, ICE using this channel isn't a loophole — it's the statute doing what Congress wrote it to do^[16].

The challengers read the same sentence differently. They say the provision lets an agency confirm an address it already has, not ask the IRS to go find one it lacks^[3]. Circuit Judge Cornelia Pillard, writing for the panel, agreed with them. She called the IRS's failure to require ICE to supply the address itself the "most egregious" problem with the policy^[3].

That reading is why the case is about form, not principle. The panel didn't rule that ICE can never get IRS data under any circumstances. It ruled that this particular process — a single point of contact submitting requests for 1.28 million people at once^[1][2] — didn't meet the statute's specific conditions^[3].

Two Rulings, Seven Months Apart, Pulling in Different Directions

Here is the part most coverage on both sides leaves out. This is not the only time the D.C. Circuit has looked at IRS-ICE data sharing this year, and the other ruling went the other way.

In April 2025, Treasury Secretary Scott Bessent signed a memorandum of understanding with the Department of Homeland Security setting up the broader framework for these requests^[16]. In February 2026, a different D.C. Circuit panel upheld the denial of an injunction against that memorandum itself, in a separate case called Centro de Trabajadores Unidos v. Bessent^[8][9]. The underlying agreement survived that challenge.

So the framework stands. What got struck down in the September ruling was the specific "Address-Sharing Policy" the IRS built to process ICE's request under that framework^[3][20]. The memorandum lives. The bulk-request pipeline built on top of it does not, for now.

That split matters because it shows the fight isn't really about whether Section 6103(i)(2) exists. It's about how far an agency can stretch it once it has real numbers to work with — one named suspect versus 1.28 million names in a single batch.

What the Government Says It's Losing, and What the Other Side Says It's Protecting

Justice Department lawyers told the court the injunction "impedes and delays federal law enforcement" and forces the government to telegraph its investigative steps in advance^[1]. Sharper conservative commentary went further, framing the ruling as three Obama-appointed judges blocking law enforcement from tracking down people with final removal orders^[14]. The administration's case is that Congress already wrote this exception into the statute; a court blocking its use at scale is, in its view, rewriting the law rather than applying it.

Pillard pushed back directly on one of the government's specific arguments — its objection to filing future court notices under seal — calling it "weak sauce" and telling the government its complaint belonged in Congress, not the courtroom^[6]. Some outlets built headlines around that phrase as though it captured the whole ruling, when it addressed one narrower procedural point^[6][15].

The plaintiffs, including immigrant-rights and taxpayer-rights groups, argue this isn't really about privacy versus enforcement in the abstract. It's about a promise the government spent thirty years making. Undocumented workers were told for decades that filing taxes with an Individual Taxpayer Identification Number, a system the IRS created in 1996 for people without Social Security numbers, would not be used against them outside tax administration^[16][17]. By one estimate, undocumented immigrants paid $96.7 billion combined in federal, state and local taxes in 2022^[12]. If filing becomes a way to be found, the plaintiffs argue, that compliance erodes — and early reports from tax preparers suggest ITIN filers are already withdrawing from the system, regardless of how the case ends^[16].

Judge Kollar-Kotelly's own numbers underline the scale of what's disputed. In a February 26, 2026 order in the same case, she found the IRS had violated Section 6103 approximately 42,695 times^[7][20] — a figure Al Jazeera led with in its own coverage, framing the story around the immigrant families whose filings were used to locate them^[7].

A Law That Runs on Trust, and What Happens If That Trust Breaks

Underneath the legal argument sits a structural one that both sides actually agree on, even if they draw different conclusions from it. The tax system depends on people reporting income the government otherwise couldn't see^[2]. Section 6103's confidentiality promise is what makes that voluntary reporting work. Several senior IRS officials, including its acting commissioner and its privacy officers, resigned over the original memorandum in 2025^[16] — read by the plaintiffs' side as an internal warning that the agreement threatened that trust, and by the administration as political resistance to a lawful policy.

Both the November 2025 injunction and the February 2026 order it's built on are preliminary. They rest on a judge's assessment of who's likely to win, not a final verdict^[13]. That means a rehearing before the full D.C. Circuit, a Supreme Court petition, or a contrary ruling from the First Circuit — where a related case is still pending — could all still reshape this^[18].

Coverage split along familiar lines. Fox News and The Washington Times reported the ruling straight but leaned on the 1.28 million figure and the enforcement stakes^[2][5], while The Washington Times notably explained the Watergate origins of Section 6103 in more detail than most left-leaning outlets did^[5]. The Washington Post's headline stated the outcome more absolutely than the ruling itself did, given that the underlying memorandum survived a separate February challenge^[4][8][9]. The New Republic built its headline around the "weak sauce" line rather than the statutory holding^[15], and The Gateway Pundit skipped the legal question entirely, framing the panel as "left-wing" and recasting the dispute as blocking pursuit of "criminals"^[14]. Senate Finance Democrats, led by Ron Wyden, have separately pressed Treasury for records on how the original requests were processed — a fight over the same policy that hasn't been decided in court and isn't likely to end there^[19].