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One after the other in recent weeks, Maria’s accounting clients raised the same horror.
“I heard that from everyone,” said the 40-year-old consultant of an undocumented small business entrepreneur in Southern California. “They came to me and they said, ‘Hey, should I pay my taxes this year? Because they’re coming to find me.”
Maria asked her to be identified only by her name, fearing she would be targeted by the Trump administration, and she said she understood well.
Maria has been in the United States for decades, has multiple degrees from the University of California, has children who are US citizens, and has applied for legal residence for many years. But like many of her clients, she said she lacked legal status.
And like many clients, she routinely paid US taxes in the past, using an individual taxpayer identification number, or what is known as Itin, instead of a Social Security number. The process said until recently that Trump administration officials announced that IRS data would be shared with ICE agents and used for the first time to target undocumented taxpayers.
Maria says she still decided to pay the tax and advises clients who have paid in the past to do the same. After all, the IRS already has most of their info, she said, and this year’s payments just show they are committed to doing the right thing.
Still, she felt betrayed, she said — an almost undocumented system of taxpayers built on their trust, but made up of lies.
“They are trying to criminalize us,” Maria said. “They are trying to do it wrong, but the government actually got it wrong.”
These complaints have spread rapidly, especially as they focus on California, where around 1.8 million unauthorized people lived, particularly in California, where around 1.8 million unauthorized people lived.
The Trump administration has defended the scheme as a legal tool that is only used to investigate individuals who commit crimes, but it has done little to alleviate concerns. The fear is clear, an immigration rights group, including a comprehensive Los Angeles-based lawsuit that provides loans to undocumented entrepreneurs.
“We think it’s really harmful to our local economy, especially in Los Angeles, and in California, but across the country.”
State leaders in Sacramento and Washington, D.C. have also spoken out against the deal, claiming that it undermines the immigrant community and the trust it has built for decades, putting billions at risk with anticipated tax revenues from undocumented Californians. Such taxpayers provided an estimated $8.5 billion in state and local taxes in California in 2022 than other states, according to the Institute for Taxation and Economic Policy.
“This agreement is a complete betrayal of the federal government’s decades of commitment not to arm taxpayer information for political purposes, and this reversal of precedent will only bring more fear within immigrant communities, making it less likely that undocumented individuals will file taxes.
He and other lawmakers have asked the Treasury inspectors to investigate the legality of the transaction by the Tax Bureau’s tax administration.
Sen. Adam Schiff (D-Calif) said such data sharing is illegal and constitutes “complete betrayal.”
“This lawlessness doesn’t make Americans safer, it just hurts our economy,” Schiff said. He said “fear spreads to immigrant communities” and “permanent damage will occur across our economy, causing serious losses in future tax revenues.”
Gov. Gavin Newsom’s office refused to answer questions about the potential impact on state funding, but expressed distrust at the administration’s focus on undocumented taxpayers given the longstanding debate that many U.S. immigrants are the leak of American resources.
“Let’s get this right. Does the Trump administration finally allow undocumented people to contribute to our economy and pay taxes?” said Diana Croft Perayo, spokesman for Newsom.
The IRS-ICE deal was first rumored, promoting lawsuits and later made public in court. There, the federal government has revealed an April 7 memorandum between Treasury Secretary Scott Bessent Kristi Noem, which outlined the sharing of taxpayer data for “Nontax Criminal Encomenced.”
In the same case, the federal government argued that the agreement is in line with federal law, saying that “the IRS generally limits the disclosure of tax returns,” but provides for certain exceptions. The IRS states that information must be shared when properly requested as part of a criminal investigation, pointing out that there are certain immigrant crimes that are criminal, including staying in the country several months after the final deletion order, and re-entering the country under certain conditions after it is deleted.
The IRS-ICE transaction stated that “establishes procedures and guardrails to ensure that such requests and subsequent transfers of information are legally and safely processed,” while the group suing that “does not point out any evidence that the information is misused and does not stand to pose a challenge.”
Espinoza of comprehensive action disagreed. ITIN holders include SME owners, which account for about a third of the group’s loan portfolio, and currently have around $2.1 million outstanding loans, he said.
“If Itin is no longer a reliable and secure vehicle to pay taxes, many immigrant entrepreneurs do not want to contribute to the formal economy by paying taxes,” he said. “They are afraid to contribute to the economy, and they are afraid to seek services from an organization like us.”
Many undocumented immigrants want to demonstrate through taxes that they are “part of this country” and “officially contributed,” but “the administration is throwing it all out the window,” Espinoza said. And the impact will become widespread, he said.
Doug Smith, vice president of policy and legal strategy for Inclusive Action, said that the group’s clients were very involved in the community as they felt empowered by the fact that “get itin, pay taxes, play according to the rules, and those actions work favorably and not hostile to weapons.”
But now he “has a very strong sense of betrayal and fear that it is causing this unfortunate and harmful withdrawal from the economy and civic space,” he said.
In addition to the IRS deal, the Trump administration has launched a crackdown on other immigrants, requiring that everyone in the country be illegally registered with the government or been thrown into prisons, allowing individuals to target in sensitive places where immigration enforcement has not occurred previously, such as courts, schools, churches, and more.
State Sen. Maria Elena Durazo, a Democrat in Los Angeles, said trust between California’s state, local government and the immigrant community has taken “decades and decades” to build, and local officials intend to do everything they can to prevent the administration from undermining it.
As part of its efforts, Durazo recently introduced a bill that would ban vendors’ personal and taxpayer data with federal immigration officials and together with road power programs in California areas, along with road power programs, unless there is a subpoena or judicial warrant.
“They want to pay taxes and they want to follow the rules, but by doing that, if their information is shared with ICE, it really undermines their trust,” Durazo said. “And we pay for the outcome.”
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