For almost 30 years, the government told immigrants without Social Security numbers the same thing: file your taxes anyway. The IRS gave them a special ID number to do it with, and promised what it promises every taxpayer — what you tell us stays with us. By law, an IRS employee can't even confirm that a particular person filed a return.

Then the Trump administration broke that promise. In April 2025, the Treasury and Homeland Security secretaries signed a deal letting Immigration and Customs Enforcement send names to the IRS and check them against tax records. Ten months later, a federal judge found the IRS had broken one of the strictest privacy laws in the country about 42,695 times — by handing ICE people's home addresses.

Now we know more about how it happened. A new book by Michael Lewis, excerpted in The Guardian on October 3, tells the story from inside the IRS — through the woman whose job was to guard that data, and who says she quit rather than help give it away.

DOGE walks in the front door

Kathleen Walters was the IRS's chief privacy officer. She ran a staff of 650 people whose whole job was making sure none of the agency's 100,000 employees leaked, lost, or even peeked at a tax return they had no business seeing.

In February 2025, Elon Musk's "Department of Government Efficiency" showed up. According to Lewis, a young DOGE staffer named Gavin Kliger walked into the IRS lobby unannounced on February 13. Nobody at the Treasury Department had a record of him. He was carrying a backpack full of government phones and laptops, and he wanted an IRS phone, an IRS laptop, and access to the computer systems holding taxpayer information. He wanted into those systems right away.

Walters wrote the legal agreement that let him into the building. It gave him access to some systems, but explicitly none with taxpayer information in them.

One of Kliger's first acts, per Lewis, was to demand the IRS fire its 6,700 probationary workers with an email claiming they had performed poorly. The head of human resources, Traci DiMartini, saw the claim was false and refused to sign it. She lost her job. The acting IRS commissioner, Doug O'Donnell — 38 years at the agency — also refused to send the email, and was pushed out. ABC News reported that O'Donnell retired amid concerns about how the Trump administration was running the IRS.

Lewis describes this as the plan Musk brought from Twitter: scare the workers, fire them in huge numbers, and hire some back if you fired the wrong ones. Anyone who stood in the way was a "blocker."

The Friday night request

On Friday evening, February 28, 2025 — the evening O'Donnell left — Walters got an email from the IRS's director of data management. Homeland Security, it said, wanted the IRS to find addresses for 700,000 names of people it believed were undocumented immigrants. Did the IRS have legal authority to use tax data that way?

Walters' answer was no. The IRS can't hand taxpayer information to another agency without Congress changing the law — and she knew exactly how hard that is, because she had just spent 18 months getting a far less controversial change through Congress so the IRS could help states collect child support.

The data Homeland Security wanted came from a specific place: returns filed with the special ID numbers the IRS created in 1996 so people without Social Security numbers could pay taxes. The IRS has collected hundreds of billions of dollars through that program. Those returns, Lewis writes, showed where roughly 7 million people might be found.

In other words: the immigrants easiest to find were the ones who had followed the rules and paid what they owed.

"Life or death stuff"

Walters thought she had stopped it. She hadn't.

On March 27, 2025, she says she found out that IRS lawyers had been quietly drafting a data-sharing agreement with Homeland Security since the end of February — and had been told not to tell her or their own boss. Walters set up a call with the Homeland Security team asking for the data. She told them the IRS could help in very narrow cases, like an immigrant wanted on a murder warrant. They wanted more than that. When she asked how many people they wanted addresses for, Walters says, they settled on 7 million.

Walters said it was "life or death stuff," and that she couldn't help do something that broke the law and would hurt people. That weekend she told the acting commissioner she was resigning — weeks short of her 20th anniversary at the IRS, and before she could retire with lifetime benefits.

The new acting commissioner, Melanie Krause, resigned first. At the time, reporting said she was leaving over the data-sharing deal signed by Treasury Secretary Scott Bessent and Homeland Security Secretary Kristi Noem. Walters' account is very different: she says Krause had been pushing the data transfer herself. Krause denies that. In a statement printed with the Guardian extract, she says she never wanted to give IRS data to Homeland Security and resigned for personal reasons after learning the Treasury had signed the agreement.

Whoever pushed hardest, the deal was signed. That part isn't in dispute.

What the IRS actually handed over

In February 2026, the IRS's own chief risk officer filed a sworn statement in court. It said ICE had asked about 1.28 million people, and the IRS had given Homeland Security information on about 47,000 of them — in most cases including address information the privacy law forbids it to share.

U.S. District Judge Colleen Kollar-Kotelly ruled that the IRS broke the tax privacy law "approximately 42,695 times by disclosing last known taxpayer addresses to ICE." She found that the IRS didn't even make sure ICE's requests met the legal requirements — and handed over addresses even when those requests were "patently deficient."

Lewis adds that IRS lawyers had earlier sworn to the court that the agency turned Homeland Security down — and admitted under questioning that it had shared the data after all.

The legal fight isn't over. In a separate case, an appeals court panel said the information being shared isn't covered by the privacy law. But on September 8, 2026, a federal appeals court upheld the order blocking the IRS from handing taxpayer data to ICE while the case brought by the Center for Taxpayer Rights continues.

Who pays for it

The cost lands on families. Lewis visits an apartment complex outside Austin, home to about a thousand people, mostly young families, at least half undocumented. ICE agents came in the spring, late at night, in unmarked cars. The next morning, tenants were gone. The property manager told Lewis the raids were "fully targeted" — ICE had people's addresses, and he doesn't know how it got them.

And the damage reaches past the people taken. Every immigrant who files a tax return now has to wonder whether the IRS will hand their home address to ICE. The people the government made easiest to find are the ones who did what it asked and paid their taxes.

It fits a pattern. The same Trump Treasury now wants to cut off tax credit refunds for about 1 million people in immigrant families, hundreds of thousands of them American children. And DOGE itself expired on July 4 with no final report and nobody willing to own what it broke.

What the record shows

The Trump administration signed a deal in April 2025 to let ICE check immigrants' names against IRS tax records. The IRS's chief privacy officer says she quit rather than help, warning it was illegal. A federal judge later ruled that the IRS broke federal tax privacy law about 42,695 times by giving ICE the addresses of people who had filed their taxes, after ICE asked about 1.28 million people.

Source

Michael Lewis, "'Elon is my prophet': how Musk's Doge team took a wrecking ball to Washington", The Guardian, October 3, 2026 — an edited extract from his book Blockers: Rebels in the Deep State.