D.C. Circuit: IRS Data-Sharing With ICE "Indisputably Contravenes" Federal Tax Privacy Law
The lawsuit filed to keep DOGE out of IRS taxpayer data just won at the D.C. Circuit. On September 8, 2026, a unanimous panel in Center for Taxpayer Rights v. IRS, No. 26-5006 (D.C. Cir. Sept. 8, 2026), affirmed a preliminary injunction against the IRS's procedure for handing taxpayer addresses to Immigration and Customs Enforcement. The opinion runs 32 pages, and one of the plaintiffs is a federal employee union, the National Federation of Federal Employees. Here is what the court said and why it matters to anyone who handles government data.
How the Case Got Here
The suit was filed in February 2025 to stop DOGE personnel from getting into IRS systems. By May 2025 it had expanded to challenge an IRS-ICE agreement under which ICE sought the last known addresses of roughly 1.28 million people. A district judge blocked that arrangement in November 2025. The D.C. Circuit has now affirmed.
The Law: 26 U.S.C. § 6103
The statute at the center of the case is 26 U.S.C. § 6103, the taxpayer confidentiality provision Congress wrote after Watergate exposed the executive branch using tax data against political enemies. The rule is simple: your tax return and return information are confidential. No federal employee may disclose them, even to another federal agency, unless Congress has authorized the disclosure. A willful violation is a felony.
There is an exception for criminal investigations, but it comes with conditions. The requesting agency must supply the taxpayer's address, and the request must come from an officer personally and directly engaged in the specific case.
What the Court Found
According to the panel, the IRS procedure did not meet those conditions. Where the statute requires the taxpayer's address, the IRS accepted any five or nine digits. Where the statute requires an officer personally and directly engaged in each case, ICE named a single person for all 1.28 million requests. The IRS replaced human review with what the court described as "a mass, automated review of millions of records at the press of a button." More than 47,000 records went out before the district court stopped the process.
The panel held that the procedure "indisputably contravenes" the statute, and it warned that the government and "its personnel face steep civil and criminal consequences" for willful violations.
Why This Matters to Federal Employees
Set aside the immigration context for a moment and look at the mechanism. A career employee asks where the legal authority for a data pull comes from. That employee is sidelined, and a system is built that says yes automatically. The D.C. Circuit's answer is that the statute does not care whether the disclosure happened through a person or a button. The legal requirements apply either way, and the people involved carry the exposure.
That exposure is personal. Section 6103 penalties reach the individuals who make unauthorized disclosures, not just the agency. If you work with protected data of any kind, that is the part of this ruling to remember.
The Practical Takeaway
This is not a final ruling. The decision affirms a preliminary injunction, and the government can still seek rehearing or Supreme Court review. But the practical guidance for federal employees does not depend on what happens next in the litigation.
If you are told to run a bulk data pull, especially one that sends records to another agency, get the instruction in writing. Ask what statutory authority supports the disclosure. Route the request to your agency's disclosure officer or privacy office before you act. Asking those questions is not obstruction; it is how the confidentiality laws are designed to work.
If you have raised concerns about a data-sharing directive and been sidelined or disciplined for it, that is a situation worth discussing with federal employee lawyers who understand how whistleblower protections and disclosure statutes fit together.
Legal Disclaimer: This content is for general informational purposes only and does not constitute legal advice. Federal employment situations are fact-specific and time-sensitive. Please consult a qualified federal employment attorney about your specific situation.