The acting commissioner of the Internal Revenue Service is anticipated to resign following the agency’s announcement that it has consented to share tax information of immigrants with Immigration and Customs Enforcement to assist in the identification and deportation of undocumented immigrants.
A source acquainted with the situation and a statement from the Treasury Department revealed that Melanie Krause is stepping down from the agency due to disagreements over the Treasury’s decision to share IRS taxpayer data with the Department of Homeland Security.
“Melanie Krause has been steering the IRS through a period of significant transformation. While we concentrate on IT modernization and restructure the agency to better serve taxpayers, we are also in the process of dismantling data silos that have long hindered our ability to identify waste, fraud, and abuse and to bring criminals to justice,” said a spokesperson from the Treasury in a statement.
Krause intends to resign after participating in the agency’s newly introduced Deferred Resignation Program, the source informed CBS News on Tuesday. The Washington Post was the first to report on her imminent resignation.
On Monday, the IRS revealed its memorandum of understanding with the Department of Homeland Security in a court document related to a lawsuit filed by Public Citizen, which seeks to prevent the Treasury Department from sharing tax return information with immigration enforcement agencies.
The exhibit indicates that the IRS will assess all requests and keep track of disclosures made under the memorandum. Although much of the memo is heavily redacted, it indicates that the IRS will provide ICE with names and addresses of immigrants, along with additional information.
This new data-sharing agreement will enable ICE to cross-reference the identities and addresses of immigrants residing illegally in the U.S. with their IRS tax records.
The Treasury contends that this agreement will help implement President Trump’s initiative to secure U.S. borders and is part of a broader nationwide immigration enforcement policy, which has led to deportations, workplace raids, and the application of the Alien Enemies Act to deport Venezuelan migrants.
Opponents argue that the IRS-DHS information sharing agreement contravenes longstanding privacy laws and undermines the privacy rights of all Americans.
A Treasury official, who requested anonymity to clarify the agency’s rationale regarding the agreement, stated that the basis for this agreement is rooted in “longstanding authorities granted by Congress, which serve to protect the privacy of law-abiding Americans while enhancing the ability to pursue criminals.”
Todd Lyons, the acting ICE director, told reporters at the Border Security Expo in Phoenix on Tuesday that this agreement will assist ICE in locating individuals who are improperly receiving benefits and are “kind of hiding in plain sight” while using someone else’s identity.
Collaboration with the Treasury and other departments is “strictly for major criminal cases,” Lyons explained.
Earlier this year, the IRS was called upon once to aid in immigration enforcement. In February, Noem sent a request to Bessent to utilize IRS Criminal Investigation personnel to assist with the immigration crackdown, according to a letter obtained by The Associated Press. This request notes the IRS’ increased funding; however, the $80 billion funding boost received by the federal tax collection agency from the Democrats’ Inflation Reduction Act has already been curtailed.
Tax law specialists from the NYU Tax Law Center stated on Monday that the agreement “threatens to infringe upon the rights of many Americans protected by longstanding laws that guard against wrongful disclosure or dissemination of their tax information.”
“In fact, it is challenging to see how the IRS could legally release information to DHS while complying with taxpayer privacy statutes,” they commented, adding that “IRS officials who approve data sharing in such scenarios risk violating the law, which could lead to criminal and civil penalties.”
The memo specifies that the IRS and ICE “will perform their duties in a manner that respects and enhances individuals’ right to privacy and will ensure their activities are compliant with laws, regulations, and sound administrative practices.”
