The American Immigration Council does not endorse or oppose candidates for elected office. We aim to provide analysis regarding the implications of the election on the U.S. immigration system.
Written by Steven Hubbard and Micaela McConnell
Tax Day is approaching, but the Trump administration’s mass deportation efforts may make many undocumented immigrants hesitant to file taxes. Some worry that providing personal information to the Internal Revenue Service (IRS) could be used against them.
Undocumented immigrants pay billions in taxes every year. However, the Trump administration’s efforts to enlist the IRS to increase arrests and deportations of immigrants has spread fear around what had become a commonplace practice to file taxes. The federal government is at risk of losing tax revenue that the United States has long counted on, especially as the IRS is already anticipating a decrease of more than 10% in tax by the April 15 deadline compared to 2024.
A Battle Over Immigrant Tax Data
A recent Washington Post investigation revealed that the Department of Homeland Security (DHS) requested the IRS to provide home addresses of 700,000 tax payers suspected of being undocumented. The IRS initially refused, citing tax privacy laws. However, the Washington Post reported on March 22 that the IRS is nearing an agreement to share confidential taxpayer information with DHS. The deal would allow the IRS to cross-reference names and addresses of individuals with final deportation orders submitted by DHS—alarming many tax and immigrant advocates about the misuse of tax data for immigration enforcement.
Representative Debbie Wasserman Schultz and more than 60 other representatives sent a letter demanding the IRS end the abuse of taxpayer’s private data that is targeting immigrant families without criminal histories.
Traditionally, the IRS has reassured undocumented immigrants that their information is confidential and would not be shared with other federal departments. Many undocumented immigrants file taxes in hopes of proving their contributions if a future pathway to legal status emerges.
Furthermore, Elon Musk’s Department of Government Efficiency (DOGE) has gone after sensitive taxpayer data to cross-reference it with other agencies that provide public benefits. However, DOGE’s move to obtain data from the Social Security Administration was recently blocked by a federal judge.
These moves raise concerns about violating tax privacy laws and leave many undocumented immigrants in a difficult position, given the risks they face by filing taxes.
Many tax and immigration experts stress that failing to file taxes can have serious consequences, from penalties for tax evasion to negative impacts on immigration cases—including naturalization applications. A history of tax compliance, however, can serve as a strong record in immigration cases, demonstrating adherence to legal and financial responsibilities.
Undocumented Immigrants’ Tax Contributions
In addition to the individual ramifications of not paying taxes, there is a lot that communities stand to lose if immigrants stop paying taxes.
Most undocumented immigrants are ineligible for a Social Security Number (SSN) and file their income tax returns using an Individual Taxpayer Identification Number (ITIN). According to the Institute on Taxation and Economic Policy (ITEP), 50% to 75% of undocumented immigrant households file tax returns using ITINs.
ITINs allow individuals without an SSN to pay their taxes and file tax returns ensuring they can comply with federal and state tax laws and contribute to local, state, and the federal economy. While undocumented immigrants frequently use ITINs, they are not the only ones—foreign nationals residing in the U.S. for a short period or working in the United States and noncitizen spouses of U.S. citizens may also use ITINs.
In 2023 alone, undocumented immigrant households contributed $89.8 billion in taxes, with $55.8 billion going to federal income taxes and $33.9 billion to state and local taxes. Their tax contributions assist in sustaining public services and programs that millions of Americans rely upon like schools, healthcare systems, infrastructure, and social programs.
It is important to recognize that undocumented immigrants make significant tax contributions even though they are excluded from many benefits funded by these taxes. For instance, they are ineligible for Social Security benefits, even though they contribute billions to the system. They also cannot claim the Earned Income Tax Credit (EITC), a tax benefit that supports low-income working families. They may be eligible for the Child Tax Credit (CTC), but only if their children have valid SSNs.
The Consequences of Weaponizing Tax Information
Immigrants, regardless of immigration status, have long contributed to the economic well-being of the nation in many ways, particularly by paying taxes. This April, which will not only include Tax Day but President Trump’s 100th day in office, will serve as a crucial indicator of how current administration priorities and rhetoric are shaping tax filings, with significant consequences for the wellbeing of millions of undocumented immigrants nationwide and the state and local economies that rely on their tax contributions.
FILED UNDER: Individual Tax Identification Number, Trump administration