ARTICLE
14 April 2025

New Data-Sharing Agreement Between DHS And IRS Will Impact Employers And Provide ICE With Unprecedented Access To Sensitive Data

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Benesch Friedlander Coplan & Aronoff LLP

Contributor

Benesch is an Am Law 200 business law firm with more than 400 attorneys and offices in Cleveland, Chicago, Columbus, New York, San Francisco, Shanghai and Wilmington. The firm is known for providing highly sophisticated legal services to national and international clients that include public and private, middle market and emerging companies, as well as private equity funds, entrepreneurs and not-for-profit organizations.

Under the MOU, U.S. Immigration and Customs Enforcement ("ICE") will provide the IRS with names and addresses of taxpayers living in the United...
United States Immigration

The Department of Homeland Security ("DHS") and the Department of Treasury reached a data-sharing agreement in a Memorandum of Understanding ("MOU") filed April 7, 2025.

Under the MOU, U.S. Immigration and Customs Enforcement ("ICE") will provide the IRS with names and addresses of taxpayers living in the United States without legal status who have final removal orders or are under criminal investigation. The IRS will then cross-reference the names and addresses with existing taxpayer data and produce information to ICE.

The IRS maintains taxpayer data on undocumented persons who register with the agency and pay federal taxes. An undocumented worker can apply for an Individual Taxpayer Identification Number ("ITIN") and use it to report earned income to the IRS. Employers commonly mistake ITINs for a Social Security Numbers because both contain nine-digits. Employers may even issue a W-2 or a 1099 to undocumented individuals as a result. Having undocumented worker pay data will provide the Department of Homeland Security ("DHS") and ICE with additional intelligence regarding companies who employ undocumented workers.

The MOU does not provide when information-sharing between the two agencies will begin, but ensuring compliance with the Form I-9s identity and work authorization requirements is key for employers to minimize liability in the event of an ICE subpoena for documents or an unexpected raid.

In addition, employers should expect the revival of Social Security Administration (SSA) no-match letters. As we previously covered, these letters are issued to employers advising that the name or Social Security number (SSN) reported for one or more employees does not "match" a name or SSN combination reflected in SSA's records. Employers are cautioned not to use the letters as evidence of immigration status but should notify affected employees. Employers should have a plan in place to terminate employees who are unable to establish continued authorization to work in the U.S.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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