California’s automatic extension for 2025 individual returns runs out on October 15, 2026. The question I hear most from ITIN filers this fall is whether a return sent to the IRS puts a home address in front of immigration agents. That deserves an answer built on the statute and the court orders.
This is a tax law post for California ITIN filers, mixed-status families and the employers who hire them. Where a filing choice touches an immigration case, bring in an immigration attorney first.
What did the federal courts decide about IRS address sharing with ICE?
Three cases matter. In Centro de Trabajadores Unidos v. Bessent, No. 25-5181 (D.C. Cir. Feb. 24, 2026), the D.C. Circuit refused to block the April 2025 IRS agreement with the Department of Homeland Security. Its key holding: a mailing address is “taxpayer identity,” which the IRS may release when a request meets every statutory condition.
The second case tested execution. In Center for Taxpayer Rights v. IRS, No. 25-cv-457 (D.D.C.), Judge Colleen Kollar-Kotelly stayed the address-sharing practice on November 21, 2025. Once the IRS admitted its matching routine often checked only for some five- or nine-digit number in the address field, her February 26, 2026 opinion counted roughly 42,695 unlawful disclosures among 47,289 records released on August 7, 2025. On September 8, 2026, the D.C. Circuit affirmed in Center for Taxpayer Rights v. IRS, No. 26-5006, holding that the procedure “indisputably contravenes the requirements of section 6103.”
In Boston, in Community Economic Development Center of Southeastern Massachusetts v. Bessent, No. 1:25-cv-12822-IT (D. Mass. Feb. 5, 2026), Judge Indira Talwani barred ICE from viewing or relying on the data it already had. That order is on appeal (1st Cir. No. 26-1329), with California among the states filing an amicus brief for the plaintiffs.
What does IRC section 6103 protect, and where is the gap?
Under 26 U.S.C. § 6103(a), returns and return information stay confidential unless Title 26 authorizes disclosure. Section 6103(i)(2) lets the IRS release identity information, which section 6103(b)(6) defines to include the mailing address, but not income figures, to a federal agency investigating a non-tax crime. The agency head must ask in writing, giving the taxpayer’s name and address, tax period, criminal statute and a specific reason, and only officers “personally and directly engaged” in that investigation may receive it. ICE cited 8 U.S.C. § 1253(a)(1), which punishes remaining after a final removal order.
So the gap is narrow. A documented, individual criminal request can still produce an address; bulk matching cannot, while these orders stand. Willful violations are felonies under 26 U.S.C. § 7213, and a taxpayer whose information is knowingly or negligently released may recover at least $1,000 per disclosure under 26 U.S.C. § 7431. Still open: these are preliminary rulings, D.C. Circuit rehearing petitions are due October 23, 2026, and Congress can amend subsection (i)(2).
Does skipping a return make a California family any safer?
Rarely, and it creates its own tax problems. The duty to file under 26 U.S.C. § 6012 and Cal. Rev. & Tax. Code § 18501 turns on income, not immigration status. Employers and banks file information returns anyway, so the IRS often has an address regardless.
For someone who owes, the addition under 26 U.S.C. § 6651(a)(1) is 5 percent of unpaid tax per month, up to 25 percent, and R&TC § 19131 mirrors it, with a $135 minimum (or the full tax, if less) after 60 days. And an unfiled year never closes. Section 6501(c)(3) lets the IRS assess “at any time,” and R&TC § 19087 lets the Franchise Tax Board estimate income and bill. A refund family faces little penalty, but refunds expire: section 6511 limits federal refunds to a three-year lookback, and R&TC § 19306 allows four years for California.
Did your household skip a year, or are you deciding whether to file your 2025 return before October 15? Refund windows and ITIN expirations run on fixed dates, and an attorney-CPA can look at the tax exposure and the confidentiality questions together before anything goes in.
What do ITIN filers give up by not filing?
First, the number. Under 26 U.S.C. § 6109(i)(3), an ITIN expires if it is not used on a return for three consecutive years, and renewal means a new Form W-7 with original or certified identity documents.
Second, credits, where federal law changed for 2025. Pub. L. 119-21 rewrote 26 U.S.C. § 24(h)(7) so the Child Tax Credit now requires a work-eligible Social Security number for a parent (at least one spouse on a joint return) as well as the child. Two ITIN parents lose the $2,200 per-child credit even for citizen children, keeping only the $500 credit for other dependents under section 24(h)(4)(C). The federal earned income credit was already closed to them by section 32(m).
California went the other way. R&TC § 17052(p) substitutes an ITIN for the Social Security number, so ITIN filers may claim the CalEITC, up to $3,756 for 2025 on earned income up to $32,900, and the Young Child Tax Credit under section 17052.1, up to $1,189 per return with a child under six. The Foster Youth Tax Credit also accepts ITINs. None of it arrives without a return.
What is at stake for a Moreno Valley family earning $48,000?
An illustration with made-up facts: Ana and Luis of Moreno Valley both use ITINs and have two citizen children, ages 4 and 9. Their 2025 wages total $48,000, with $2,100 federal and $600 California tax withheld. Federally, the $31,500 joint standard deduction leaves $16,500 taxable and $1,650 of tax. Two $500 dependent credits cut that to $650, so they are owed $1,450. With one work-eligible SSN between them, the Child Tax Credit would be $4,400, erasing the tax and adding about $2,750 refundable.
On the 2025 Form 540, the $11,412 standard deduction leaves $36,588 taxable and about $510 of tax, erased by $1,256 of exemption credits, so the full $600 comes back. At $48,000 they exceed the CalEITC limit, and the Young Child Tax Credit requires CalEITC eligibility. Near $30,000 of wages, both would apply in phased-down amounts. Either way, $2,050 is waiting, and the federal share lapses if the return sits past three years.
Can the Franchise Tax Board give California returns to immigration agents?
California’s protection sits in the tax code. R&TC § 19542 makes unauthorized disclosure of return particulars a misdemeanor, and section 19552 confines shared information to tax administration. FTB does exchange data with the IRS under section 19551, but only for tax purposes. A state return is not hidden from the IRS.
What about the California Values Act? Gov. Code § 7284.6 forbids sharing a home or work address for immigration enforcement, but it binds “California law enforcement agencies” as defined in section 7284.4. FTB, a tax agency, is governed by sections 19542 and 19552, and its privacy notice says it honors subpoenas and court orders as the law permits.
What should a California employer of ITIN holders do differently?
Keep Form I-9, the eligibility file, separate from the W-4 and W-2 tax documents. IRS Publication 15 says not to accept an ITIN in place of an SSN; it is not work authorization. If an SSA Employer Correction Request arrives, note its own statement that it does not address immigration status and should not drive adverse action. Lab. Code § 1019.1 penalizes demanding extra I-9 documents (up to $10,000 per violation), section 1019 bars retaliatory threats to call immigration authorities, and section 1171.5 extends state labor protections regardless of status.
Paying cash is the expensive shortcut. Wages still require withholding under Unemp. Ins. Code § 13020, and EDD adds 15 percent penalties for late contributions and unfiled reports (sections 1112 and 1126). Skipping itemized wage statements violates Lab. Code § 226 (section 226.3 penalties run $250, then $1,000, per employee), and sub-minimum pay brings section 1197.1 penalties of $100 or $250 per underpaid employee per pay period. Section 226 accepts an employee number instead of an SSN. Employers already off the books should see our post on the IRS voluntary disclosure redesign and California agencies.
| Issue | Federal rule | California rule |
|---|---|---|
| Late filing when tax is owed | 5% per month, 25% cap (§ 6651) | 5% per month, 25% cap, $135 minimum after 60 days (§ 19131) |
| No return filed | Assessment at any time (§ 6501(c)(3)) | FTB may estimate at any time (§ 19087) |
| Refund window | Three-year lookback (§ 6511) | Four years (§ 19306) |
| ITIN parents, 2025 credits | No CTC or EITC; $500 per dependent | CalEITC and YCTC within income limits |
| Wrongful disclosure | Felony (§ 7213) | Misdemeanor (§ 19542) |
Frequently Asked Questions
Can the IRS still share my address with ICE?
Only in narrow cases. The D.C. Circuit reads IRC section 6103(i)(2) to allow release of an address when a federal agency head makes a written request tied to a specific non-tax criminal investigation. Courts have halted the 2025 bulk matching, but those rulings are preliminary and could change on appeal or through legislation.
Will my ITIN expire if I stop filing?
Yes. Under IRC section 6109(i)(3), an ITIN expires when it has not appeared on a federal return, either as filer, spouse or dependent, for three consecutive tax years. Renewing it requires a new Form W-7 and original or certified identity documents, which can delay a later refund.
Can ITIN parents claim the Child Tax Credit for 2025?
Not unless one spouse has a work-eligible Social Security number. Amended IRC section 24(h)(7) requires an SSN for the parent, or one spouse on a joint return, plus the child. Two ITIN parents can still claim a $500 credit for each child as an other dependent, but it is nonrefundable.
Does the California Values Act stop the Franchise Tax Board from sharing my return?
Not directly. The Values Act restricts California law enforcement agencies. The Franchise Tax Board is a tax agency, and its confidentiality duties come from Revenue and Taxation Code sections 19542 and 19552, which make unauthorized disclosure a misdemeanor and limit shared data to tax administration. FTB does exchange information with the IRS for tax purposes.
Do filed tax returns matter in an immigration case?
They can. The good moral character standard in 8 U.S.C. section 1101(f) has a catch-all, and 8 C.F.R. 316.10(b)(3)(iii) lets officials weigh unlawful acts during the statutory period. Whether a missed return counts depends on the facts, so talk with an immigration attorney before amending old returns or changing how you file.
Can a California employer pay ITIN holders in cash to stay off payroll?
That creates its own liability. California still requires income tax withholding under Unemployment Insurance Code section 13020, and EDD imposes 15 percent penalties for unpaid contributions and missing reports. Missing wage statements violate Labor Code section 226, and minimum wage shortfalls trigger section 1197.1 penalties per pay period.
How North Star Law Firm Can Help
North Star Law Firm helps California households and employers across the Inland Empire, the Sacramento area and the rest of the state bring unfiled returns current, request penalty abatement where the facts support it, and clean up payroll tax and EDD problems before they turn into assessments. Phillip Zagotti is a California attorney and a CPA who represents taxpayers before the IRS, the Franchise Tax Board, the Office of Tax Appeals and the U.S. Tax Court.
If you are weighing whether to file, or you employ workers and want your payroll on solid ground, contact North Star Law Firm or schedule a consultation.