In a move that threatens both the economic stability of Massachusetts and the trust of immigrant communities, the federal government finalized a controversial agreement this month allowing the Internal Revenue Service (IRS) to share confidential taxpayer information with the Department of Homeland Security (DHS). For decades, the IRS has assured taxpayers, both undocumented and those with residential status, that their information would remain confidential, encouraging compliance with tax laws. This new data-sharing arrangement fundamentally violates that promise and threatens to undermine a system that has benefited both immigrants and the broader community.
The arrangement between the IRS and DHS allows immigration authorities to submit names and addresses of people they suspect of violating immigration laws, which the IRS would then cross-reference with taxpayer records. Several senior IRS officials, including the acting commissioner, have reportedly resigned or announced plans to leave the agency over concerns about the legality and ethics of the arrangement.
The Economic Impact on Massachusetts
According to the Institute on Taxation and Economic Policy (ITEP), immigrants without legal status contributed nearly $650 million in state and local taxes to Massachusetts in 2022 alone. This substantial sum helps fund essential services from public schools and healthcare to infrastructure and emergency services that all Massachusetts residents rely on daily.
The ITEP report further notes that if all immigrants without status were granted work authorizations, Massachusetts state and local tax revenue would have climbed to nearly $850 million in 2022 – an increase of approximately $200 million.
Immigrants of all statuses, which make up approximately 22% of the labor force, contributed $20.4 billion to the state in taxes in 2023 – with $51.8 billion estimated spending power (according to the American Immigration Council). As recent enforcement actions have targeted not only those without permanent legal status but also immigrants with permanent residency and in some cases even U.S. citizens, it is important to acknowledge this. All immigrants are endangered by this new arrangement, which exists entirely as a means to surveil and target individuals more efficiently.
A One-Way Relationship
What makes this situation even more troubling is that while immigrants pay billions in taxes nationally, they receive far fewer benefits than citizens. In Massachusetts, immigrant or mixed-status families who work and pay taxes are currently prevented from receiving the Earned Income Tax Credit (EITC) if any family member in the household is ineligible for a Social Security Number. This means approximately 21,000 to 26,000 households representing between 61,000 and 76,000 individuals are ineligible for the state’s EITC solely due to immigration status. These are working families who pay the same taxes as their neighbors but receive significantly less in return.
The Economic Consequences of Mass Deportation
If the administration’s deportation plans materialize at scale, Massachusetts stands to lose hundreds of millions in tax revenue. According to ITEP, for every million undocumented immigrants deported nationally, public services lose approximately $8.9 billion in tax revenue.
Beyond direct tax contributions, immigrants comprise a significant portion of the Massachusetts workforce, particularly in essential industries like healthcare, construction, and food service. The state’s economy has become increasingly dependent on immigrant labor as the aging native-born population creates worker shortages that constrain economic growth. Many of the people who provide these essential services, like caring for home-bound elderly or disabled people, are also in danger of losing their legal status due to additional policy changes made by this administration, such as the termination of CBP One app parole.
The IRS-DHS data-sharing agreement represents not just a breach of trust with immigrant taxpayers, but a potential economic self-inflicted wound for Massachusetts communities.
A Betrayal of American Values
The administration’s mass deportation plans will tear apart families, destroy communities, and traumatize millions. It puts innocent people at risk of violence and persecution simply for seeking a better life while contributing to our society. Many immigrants have lived and worked in Massachusetts for decades, raising their children, starting businesses, and becoming essential members of their communities.
The tax contributions and labor immigrants provide our Commonwealth are critical; but even more important to our society and way of life is how immigrants enrich Massachusetts through their talents and ingenuity. They drive innovation in our universities and research institutions, launch businesses that create jobs, teach in our schools, provide vital healthcare services, and enhance our cultural landscape through art, music, cuisine, and literature. Massachusetts’ competitive edge in fields like biotechnology, education, healthcare, and the arts is directly tied to the diverse perspectives and expertise that immigrants bring. The current data-sharing policy and the deportation agenda it enables threaten not just tax revenue but this rich ecosystem of innovation and cultural vibrancy that makes our state thrive.
When the government weaponizes tax compliance against vulnerable people who have been encouraged to pay into the system, it undermines the rule of law and erodes trust in all government institutions. This approach damages our democracy by teaching millions that participation in civic duties leads not to inclusion but to punishment. All U.S. residents, regardless of immigration status, are endangered by this affront to democracy and our civil rights.
Taking Action: What You Can Do
If you’re concerned about the IRS-DHS data-sharing agreement and its impact on immigrant communities in Massachusetts, here are specific actions you can take:
- Contact your elected officials: Call, email, or write to your state representatives, senators, and Massachusetts’ congressional delegation to voice opposition to the data-sharing agreement. Tell them to publicly denounce the practice and support legislation to protect taxpayer privacy.
- Support legal challenges: Immigrant rights groups have filed lawsuits to block the IRS from sharing data with ICE. Organizations like the ACLU of Massachusetts and Public Citizen are leading legal challenges against this data-sharing practice.
- Connect with MIRA: Sign the Petition to Protect Our Immigrant Communities to receive updates so you can support our work, know about new developments and resources, and participate in whatever way you are able when rallies, letter writing campaigns, or other actions are being organized.
Donate to help us continue this work.
- Educate your community: Organize or attend community forums, share accurate information about immigrant tax contributions, and help dispel myths about immigration. Check out the MIRA Policy Update page, MIRA Coalition Blog, or sign up for our weekly bulletin for accurate and timely information and resources. Follow our Youtube channel, Instagram page, and Facebook page for more you can share.
- Engage with your local government: Attend city council, town meeting, and school committee meetings and advocate for local ordinances that protect immigrant communities and limit cooperation with federal immigration enforcement. Often overlooked, decisions are made in these meetings that have direct and lasting impacts on your community – change starts here.