WASHINGTON >> Several top Internal Revenue Service officials, including the acting commissioner, are preparing to quit after the Trump administration pushed the agency to use its protected tax records to help homeland security officials deport immigrants, according to people familiar with the matter.

The agreement between the IRS and Immigration and Customs Enforcement, disclosed in a court filing Monday, is a fundamental departure from decades of practice at the tax collector, which has sought to keep information submitted by immigrants lacking legal status confidential. Under the terms of the deal, a partially redacted version of which was submitted in the case, ICE officials can ask the IRS for information about people who have been ordered to leave the United States or whom they are otherwise investigating. The two agencies have not yet shared any information, the filings said.

Federal law tightly controls taxpayer information, protecting home addresses, earnings and other data from disclosure even to other government agencies. IRS officials have for weeks raised concerns about the Trump administration’s plan to use the agency to help with deportations, warning it could be illegal in negotiations over the agreement.

Who’s leaving

The deal has fueled further turmoil at the top of the agency, which had already been rocked by mass layoffs and several leadership changes during its busiest period, when millions of Americans file their taxes. Among those leaving is Melanie Krause, the acting leader of the IRS, who is expected to take the administration’s latest deferred resignation offer, according to five people familiar with her plans.

The planned resignation of Krause, who took over the agency less than two months ago after another interim leader stepped down, has taken IRS employees by surprise, the people said. Once seen as someone aligned with Elon Musk’s Department of Government Efficiency, she nevertheless concluded that she was uncomfortable with the direction of the IRS under the Trump administration, the people said.

Several other top IRS officials, including the chief financial officer, the chief of staff and the chief risk officer, are also leaving or have left the agency in recent days, three of the people familiar with the moves said.

Kathleen Walters, the chief privacy officer, is also taking the resignation offer, after having provided a statement in court about the agreement to share information with ICE, the people said. Previously, the top IRS lawyer had been demoted as the agreement came together and was replaced by a former Trump nominee.

It was unclear to several current and former IRS officials on Tuesday night who would next lead the tax agency. President Donald Trump has nominated Billy Long, a Republican former member of Congress with little background in tax, to lead the IRS. Long is still awaiting Senate confirmation.

While the Trump administration has pushed for several deep changes at the IRS, it has been the desire to challenge decades-old protections of taxpayer information that has most alarmed many at the agency.

“It’s unprecedented,” Nina Olson, executive director of the Center for Taxpayer Rights and a former top IRS official, said of the administration’s plan.

Legal carve-out

There are narrow exceptions to the prohibition on sharing tax information, and the agreement shows that the administration will rely on a carve-out allowing its use in criminal investigations. The agreement repeatedly refers to a law that penalizes migrants who have not left the United States despite having received a judicial order to do so.

A Treasury spokesperson said the agreement was “founded in long-standing authorities granted by Congress, which serve to protect the privacy of law-abiding Americans while streamlining the ability to pursue criminals.” The spokesperson did not respond to a request for comment about the departures of Krause and other top IRS employees.

Billions at stake

Many workers in the country illegally pay taxes, improving the financial outlook for federal programs like Social Security.

Immigration activists and tax lawyers said they had long trusted that the IRS would protect the confidentiality of migrants’ tax information. Advocacy groups have sued to try to block information sharing, and the Trump administration disclosed the agreement in response to that suit.

Audrey Casillas, who helps low-income residents in the Los Angeles area file their taxes, said fewer people were coming in to file this year because they don’t want to be deported.

“The fear is real,” said Casillas, who works on economic development efforts at the Koreatown Youth and Community Center. “There a lot of no shows. Clients are asking us: ‘Is ICE going to be there when we do our taxes?’”

In a report, the Yale Budget Lab estimates that in 2023 unauthorized immigrant workers paid $66 billion in federal taxes, with roughly $43 billion of that taking the form of the payroll taxes that fund Social Security and Medicare.

To complete a tax return in the spring, the IRS has allowed these workers to submit returns using a separate nine-digit code called an individual taxpayer identification number.

Over time, economists expect that fewer migrants will want to work over-the-table jobs if they fear that tax information could be used to deport them. This would ultimately reduce revenue, and the Yale Budget Lab estimates that the loss from fewer immigrants paying taxes could amount to $313 billion over 10 years.

How many immigrants lacking legal status could be caught up in the partnership between the IRS and ICE is unclear. The agreement states that migrants with orders to leave the country will be the primary target. ICE officials recently told their IRS counterparts that they would hope to use tax information to help deport as many as 7 million people, according to four people familiar with the remarks.