A three-judge D.C. Circuit panel of Obama appointees on Tuesday affirmed a lower-court order blocking the IRS’s mass “Data-Exchange Procedure” that handed Immigration and Customs Enforcement last-known addresses for tens of thousands of people ICE said were under criminal investigation for remaining in the country after a final removal order.
As The Gateway Pundit previously reported, the Department of Homeland Security (DHS) under Secretary Kristi Noem and the IRS reached a landmark interagency Memorandum of Understanding (MOU) to break down federal bureaucracy silos and aid in national deportation efforts.
Under the agreement, ICE sent requests to the IRS to cross-reference addresses for over 1.2 million illegal immigrants who failed to leave the country after a 90-day grace period following a final removal order.
When the deal was first inked, left-wing bureaucrats threw a massive temper tantrum, including acting IRS Commissioner Melanie Krause, who resigned in protest over the agency assisting federal law enforcement, as The Gateway Pundit reported.
Far-left open-border activist groups, led by the “Center for Taxpayer Rights” and union bosses, immediately ran to the federal courts in Washington, D.C., demanding a halt to the program.
Now, the activist appeals court panel, made up of Judges Cornelia “Nina” Pillard, Patricia Millett, and Robert Wilkins, has ruled against the DOJ, finding that the IRS’s “Data-Exchange Procedure” failed to comply with the strict statutory requirements of Section 6103 of the Internal Revenue Code, which generally mandates that taxpayer return information remain confidential.
In June 2025, ICE Acting Director Todd Lyons asked the IRS for last-known addresses tied to about 1.28 million people ICE identified in connection with 8 U.S.C. § 1253(a)(1), the federal crime of willfully remaining after a final removal order.
The IRS processed the batch under an April 2025 memorandum of understanding between Treasury and DHS and produced 47,289 address records. More than 90 percent of those matches came from Tax Identification Number matching, not a full name-and-address check.
Adding insult to injury, Judge Pillard openly mocked the Trump Administration’s legal arguments in the written opinion. Addressing DOJ arguments regarding the lower court’s requirement that the IRS give advance notice before sharing data, Pillard dismissed the administration’s claims as “weak sauce”.
“The IRS also asserts that the preliminary injunction is ‘highly unusual and harmful’ because it requires the IRS to provide the district court with ‘prior notice of criminal investigatory activity.’ That argument is weak sauce where the district court has permitted the IRS to file any necessary notifications ‘under seal’…”
JUST IN: D.C. Circuit says IRS decision to share taxpayer info with DHS tens of thousands of violates the law — and that the administration’s rebuttal to that claim is “weak sauce.” https://t.co/hHeeN3jYPo pic.twitter.com/gp0ciUllwo
— Kyle Cheney (@kyledcheney) September 8, 2026
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