Immigrants fear deportation over filing taxes due to IRS-ICE agreement
10% fewer undocumented immigrants filing their taxes would mean a decrease of $9.5 billion a year in tax revenue, a tax policy organization found.
Like millions of American citizens and immigrants, Ivan filed his taxes last year. But Ivan, 54, a Massachusetts resident who hails from Colombia, is worried a recent agreement between the IRS and Immigration and Customs Enforcement means he is in danger of being deported for doing what he believed was the right thing.
And if taxpayers like Ivan decide not to file taxes because the IRS has said it will share certain tax information filed by undocumented immigrants with ICE, it could cumulatively eliminate billions in tax revenue and create “a massive problem” for citizens and immigrants alike, experts said.
Undocumented immigrants paid $96.7 billion in federal, state and local taxes in 2022, according to the Institute on Taxation and Economic Policy, a nonprofit, nonpartisan tax policy organization. About $59.4 billion of that went to the federal government and $37.3 billion to state and local governments, according to the group’s analysis. It found that even a 10% decrease in the number of undocumented immigrants filing their taxes would mean a decrease of $9.5 billion a year in tax revenue.
“The biggest issue from a revenue standpoint is that opening up tax records for immigration enforcement is going to reduce tax compliance of immigrants, whether undocumented or not, and that will have a significant impact on tax revenue,” said Tom Bowman, a policy counsel with the Center for Democracy and Technology’s security and surveillance project.
The agreement between the IRS and ICE is a break with the longtime precedent of the federal government’s telling people that tax information would not be used against undocumented people to seek their deportation. Lawyers, advocates and other immigrants have also spread the same message — only to have that sense of safety come crashing down for undocumented immigrants like Ivan under the new Trump administration policy.
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