A US federal appeals court has upheld an injunction preventing the Internal Revenue Service from sharing taxpayers' personal information, such as home addresses, with immigration enforcement authorities, ruling that the Trump administration's data-sharing policy was unlawful. The US Court of Appeals for the District of Columbia Circuit found that the IRS had failed to ensure Immigration and Customs Enforcement's requests met the strict conditions required under a post-Watergate federal tax-confidentiality law, which generally prohibits the IRS from disclosing tax-return information to other agencies. The ruling is significant because it reinforces legal limits on how far federal agencies can go in using tax data to support the administration's mass deportation agenda.

The dispute arose after ICE requested the last known addresses of 1.28 million suspected illegal immigrants, and the IRS had already shared roughly 47,000 taxpayer records before a lower court blocked the practice. Circuit Judge Cornelia Pillard said the IRS's procedures violated the law in several ways, most notably by not requiring ICE to name a specific taxpayer address, a concrete reason for each request, or an individual federal employee directly involved in a qualifying investigation — noting ICE listed the same point of contact for all 1.28 million requests. The panel also found the arrangement breached privacy protections by creating a distinct, automated pathway that stripped non-citizens of safeguards normally guaranteed to all taxpayers. The Department of Homeland Security said it disagreed with the ruling and would continue pursuing "every lawful tool" to remove illegal immigrants with final removal orders.