The White House has ousted Billy Long as IRS commissioner just two months after his confirmation, and does so against the backdrop of DHS’s persistent efforts to access confidential IRS taxpayer data, despite IRS officials’ well-founded legal concerns. Publicly-available details about the reasons for Long’s departure are limited, but reporting suggests that the “White House was not happy” that the IRS provided data to DHS for only the small share of taxpayers whose information the IRS could match exactly.
Lambert here: Wait. The DHS was demanding bad data?
IRS officials’ concerns about large-scale data sharing are well-founded: as we have repeatedly highlighted, they face potential criminal and civil consequences for violating taxpayer privacy protections.
ProPublica reported that in June, DHS sought the data of 7.3 million people. It is unclear exactly how many taxpayer records have been requested or shared more recently, but several reports suggest that DHS is seeking or will seek millions of taxpayers’ information. The Administration is claiming that it can use an exception to taxpayer privacy statutes that allows data sharing for tax filers under criminal investigation. But unlawful physical presence in the US is a civil violation subject to deportation, and the number of criminal immigration violations being charged is much smaller (numbering in the thousands per month), so 7.3 million is far more people than could plausibly be under investigation for a crime. Moreover, the White House’s public statements also indicate that the IRS data will be used to carry out mass deportations, not criminal investigations. This means that, as we have previously explained, attempts to use IRS data to locate people for civil deportation—as opposed to for criminal investigations—would violate the longstanding privacy protections in the Internal Revenue Code.
For example, say the Administration did unlawfully send tax data for some 7 million people – the number in the June request. Damages that could be awarded in a class action suit on behalf of affected taxpayers may amount to $7 billion or more for unlawful disclosure from IRS to DHS ($1,000 times 7 million taxpayers whose information would be unlawfully shared). That cost would come on top of DOGE-driven actions in the tax space that may have already cost the federal government hundreds of billions of dollars or more.
The damages could ultimately be even larger than $7 billion in several scenarios
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