IRS/ICE information sharing deal betrays trust and undermines immigrant contributions

The unprecedented pending agreement to allow the Internal Revenue Service (IRS) to provide tax data to Immigration and Customs Enforcement (ICE) confirming names and addresses of long-term immigrants undermines at least 30 years of trust in the government telling immigrants it’s safe to file their taxes.

Undocumented workers’ wages are subject to the same tax withholding and reporting requirements that apply to other U.S. residents, and most of them file and keep records of their tax returns in hopes it will help them make a case to apply for legal residency, as it did with the 1986 Immigration Reform and Control Act.

Since then, the IRS has reassured undocumented workers that their tax information is confidential and that it is safe for them to file income tax returns without fear of being deported. More than half of the roughly 11 million undocumented immigrants in the country do so, filing with individual taxpayer numbers, or ITINs, since they are ineligible for Social Security numbers.

Like all personal tax information — including name and address — confidential ITIN information is closely guarded by the IRS, backed by civil and criminal penalties for disclosure. By striking a deal with ICE, this IRS betrayal will not only hurt long-term immigrants, but our economy and funding of government services as well. Instead of following the rules and paying taxes as so many have for so long, even long-term immigrant contributors are now likely to skip the annual filing and go into hiding rather than risk likely deportation.

The ripple effect of those lost tax dollars will be significant. According to the Colorado Fiscal Institute, Colorado immigrants, regardless of status, pay $2 billion in state and local taxes and $4.6 billion in federal taxes annually. That includes $2.6 billion in Social Security (which they cannot collect at retirement) and $697.2 million in Medicare contributions. Colorado's undocumented residents alone contributed $436.5 million in state and local taxes in 2022, notably at a higher effective tax rate (7.8%) than the top 1% of income earners (7%).

Immigrants are not just contributors, they are vital to the state’s economic vitality and community strength. Statewide, immigrant households earn $25.7 billion in income and hold $19.1 billion in spending capacity. For every dollar earned, immigrants generate $1.60 in economic activity. Rather than punishing those contributions through crooked agency side-deals leading to deportation, granting work authorization to undocumented immigrants could increase their tax contributions to $537.8 million annually in Colorado alone.

Every law, whether it pertains to data privacy, worker protections, or fiscal policy, affects the immigrant community. Policies that harm immigrants can have severe consequences for our economy, while forward-thinking, inclusive immigration policies can strengthen economic resilience, especially during challenging times. Supporting immigrants isn’t just a moral imperative — it’s an economic necessity that helps sustain growth and stability for all.

The Trump administration must come to recognize that reality and abandon this disastrous policy immediately.