On a Friday afternoon a few weeks into Donald Trump’s presidency, Valentina and Tania got out of work to undertake a mission. The two sisters had started at dawn their shifts at a factory in North Carolina assembling pre-fab walls, and now they were to send a package to their family in Honduras. Over arroz con leche and black coffee, they sorted through piles of used clothes, kitchenware and toys. Before meeting up with a third sister, Lisa, they made a pit stop at Walmart, where they Facetimed their mother some 1,500 miles away to ask about sending home a pair of sneakers, an air fryer, perhaps an electric skillet.
The gifts amounted to an in-kind remittance, one of the ways that migrant workers in the United States support their communities of origin. For Valentina, working in the U.S. has everything to do with sustaining life at home, but Trump’s presidency brought a new terror into daily life. (The women’s names, like those of all the undocumented immigrants quoted in this story, have been changed to protect their identity.)
“We aren’t at ease in this country. We live with fear of going out to work,” Valentina told me. “Normally you come and say it’s going to be only four years, but I’ve been here four years and the goals haven’t been met yet.” Those goals are tied to remittances: helping out her mother and financing the construction of a house in Honduras.
Remittances are a fundamental part of the migration cycle for Latin American workers in the United States. The most common way to send remittances is via money-transfer services like Western Union or Moneygram. Those transfers, which last year amounted to $740 billion, are targeted by Trump’s remittance tax, one of the lesser-known provisions in the so-called One Big Beautiful Bill Act. The legislation has established a 1% tax for undocumented immigrants sending international money transfers, to go into effect in January 2026. It does not apply to bank or credit card payments, but only wire transfers, most commonly used by workers who can’t open a bank account in the United States.
Couched as a fiscal measure, the tax is yet another of the latest thrusts of the administration’s anti-immigrant campaign.
“It’s going to impact us a lot,” said Gerardo, who comes from the state of Jalisco, in Mexico, and works installing air-conditioning systems in North Carolina. Gerardo already pays a $10 fee for each $2,000 transfer he sends to his parents and 10-year-old daughter. The tax will add another $20 to the bill.
“It’s a question of intimidation and aggression towards migrants.”
The money has covered his daughter’s food, clothes and school supplies, the cost of a surgery his father needed, and the payments for construction of a modest house for his family. Meanwhile, the cost of living in the U.S. steadily climbed since he arrived in 2022, so Gerardo kept his overhead low by sharing a trailer with three other people and taking an extra gig one day a week as a landscaper.
Migrants go to great lengths to send money home. Eli, a single mother in her 40s who came to the U.S. with two of her three sons, sent two in-kind remittance boxes to family in Honduras while working at a construction company in Austin, Texas. She was about to send a third last Christmas, but work at the company slowed down and she decided to save the money. Eli moved to North Carolina to find work; she eventually was hired at a Honduran restaurant, where she earns $12 an hour. The management hired her to work 40 hours a week. They usually skimp on her shifts, and her boss calls her in with less than a 12-hour notice, making it impossible for Eli to get another job. Even when she can’t afford rent, though, she tries to send home $150 to $200 a week.
“While migrants are in the United States, they’re going to find ways to remit, whether formal or informal,” said Ricardo Barrientos, director of the Central American Institute for Fiscal Policy, in Guatemala City, Guatemala. Though Mexico receives the highest gross volume of remittances of any nation in Latin America, as a percentage of the economy, there is no country in the region more dependent on remittances than Guatemala. Last year, total remittances to Guatemala amounted to $21.5 billion, a fifth of the country’s gross domestic product; exports, in contrast, brought Guatemala $14.6 billion. Remittance payments amount to more than the country’s entire tax base. According to Barrientos’ projections, the tax will cause a deceleration in remittance payments, though it won’t be catastrophic for the Guatemalan economy. Barrientos says he believes the tax serves “more of a migratory control objective.”
“It’s not a question of money,” he told me. “It’s a question of intimidation and aggression towards migrants.”
The remittance tax also comes with a data-collection component, as Nicholas Anthony, a privacy expert at the Cato Institute, a Washington think tank, noted in a recent article. Senders will likely have to provide some kind of identifying document to prove their citizenship or be subject to the tax. Businesses that handle remittances will then make quarterly tax payments to the IRS, which presumably will include senders’ information.
The tax was instituted just weeks after the IRS signed an April 7 data-sharing agreement with Immigration and Customs Enforcement, which is attempting to consolidate unprecedented amounts of undocumented immigrants’ personal data for use in deportations. The data-sharing agreement allows the IRS to hand over taxpayer information to ICE.
Since ICE was created in 2003, the agency has bolstered its deportation operations by gathering information from local and state government databases along with private sources. According to a 2022 investigation by the Georgetown Law Center on Privacy and Technology, this patchwork of databases gives ICE a window into the lives of most people in the United States, citizens and noncitizens alike.
“ICE has created a surveillance infrastructure that enables it to pull detailed dossiers on nearly anyone, seemingly at any time,” states the Georgetown law center report. ICE has assembled this infrastructure bit by bit, bringing together disparate sources, each a building block that gives it access to information about a slice of the population. By accessing state Department of Motor Vehicles records, procured on a state-by-state basis, ICE officers are able to scan driver’s license photos of three out of four adults in the United States — a figure that is incomplete only because ICE does not have access to DMV records in all states. The agency also uses a credit-reporting database that stores information about the utilities payments, and therefore addresses, of three out of four adults in the country. Additionally, ICE can sift through information about employment, health care, housing and child welfare. The agency’s transformation into a domestic surveillance agency has taken place with little oversight, evading regulation by both federal lawmakers and state authorities.
While ICE’s data-gathering operations date back to the George W. Bush administration, the Trump administration has ramped up the measures. The Department of Government Efficiency, formerly headed by Elon Musk, has been key to federal data-gathering efforts, spearheading efforts to consolidate once-siloed personal data across the government.
“A very important privacy principle is if the government collects data for one reason, they cannot use it for another reason,” said Adam Schwartz, the privacy litigation director at the Electronic Frontier Foundation, which is suing DOGE to stop the department from accessing records on millions of people.
DOGE’s data-for-deportations project harkens back to what Schwartz calls “the original sin at the dawn of the database era” in the 1930s. The Census Bureau turned census data over to the Department of Defense, which used the information to sweep up Japanese Americans and send them to internment camps.
“This administration has really fought to take a kind of all-of-government approach to immigration enforcement.”
Privacy legislation passed in the 1970s prohibits such misuse of data. However, as Schwartz notes, this system of data privacy protection is under attack from the current administration. “What the government is trying to achieve is one big database with all of the data that the president can use, however he wants,” Schwartz told me. The federal government has contracted with the tech company Palantir to make information from across databases more easily searchable. While the DOGE data-mining project isn’t limited to immigrants’ data — food-stamp recipients and federal employees are also targeted — it is a key part of the Trump administration’s anti-immigrant strategy.
“This administration has really fought to take a kind of all-of-government approach to immigration enforcement,” Colleen Putzel-Kavanaugh, associate policy analyst at the Washington-based Migration Policy Institute, told me. As Putzel-Kavanaugh summarized in a recent report, beyond the databases that ICE already can access, DOGE has also requested information from Medicaid and Medicare, the Social Security Administration, the Education Department and the Postal Service. It is particularly interested in data on immigration status and home and work addresses.
That information allows ICE to fill a void: while the agency has access to final removal orders, it doesn’t always have the means to track people down. “Depending on when a removal order was carried out, it could be 20 years old, and so that person may not live at the address that they most recently have on file,” Putzel-Kavanaugh told me. “A lot of this expansion is to have their information as updated as possible, because what ICE already has access to may be quite dated.”
As ICE struggles to reach deportation targets, the Trump administration has made clear it intends to incentivize immigrants to self-deport. These data-gathering measures, says Putzel-Kavanaugh in her report, not only feed into the deportation machine; their secondary effect is to make life more difficult for undocumented workers, in an attempt to force them to voluntarily leave the country.
The IRS happens to maintain one of the largest government databases with up-to-date addresses about undocumented immigrants, millions of whom declare taxes using individual taxpayer identification numbers. ITINs were established in 1996 to gather taxes from workers who lacked regular migration status. Despite being ineligible for benefits, undocumented workers pay billions of dollars in tax each year. (Last year, the total came to $96.7 billion, according to the Institute on Taxation and Economic Policy.) Using an ITIN number has long been touted as a way to demonstrate good standing with the government, and parents of U.S.-citizen children can receive the federal child tax credit, a payment of $2,000 per minor, as an added incentive for mixed-status families to file taxes. In some states, undocumented workers also use ITIN numbers to apply for driver’s licenses, business licenses and loans. As tax returns have taxpayers’ home and work addresses, ITIN numbers are a trove of information for ICE to track down undocumented workers.
But the remittance tax is expected to decrease overall tax compliance among undocumented immigrants, as people fear their information could be used for deportation. On March 14, in a federal district court in Washington, D.C., the nonprofit Public Citizen filed to stop the ICE-IRS agreement, but the court denied the injunction. Public Citizen is appealing the decision and expects the case will be heard later this year.
“It’s not just the tax revenue that we’re going to lose if people are scared to pay their taxes, we’re also going to force people more into the underground economy,” Michael Kirkpatrick, the attorney representing Public Citizen, told me. “People might not get a driver’s license, will not get a business license, will be working off the books with no regulation. Everybody is at risk if people quit using the ITIN that allows them to participate in the regular system.”
“It’s a burden on everybody, because the underground economy is not regulated.”
That could result in more unlicensed drivers on the road, or food trucks that operate without the oversight of health codes. “If those folks are forced underground because they can no longer get their business license, then you’ve got people selling tacos on the street corner out of a cooler instead of a licensed food truck. That creates a risk, you know, of foodborne illness, for everybody,” Kirkpatrick added. “It’s not just a burden on the undocumented person who’s going to be forced into the underground economy, it’s a burden on everybody, because the underground economy is not regulated for health and safety.”
Taxpayer data is supposed to be kept confidential unless used for criminal prosecutions. That doesn’t typically include immigration enforcement, as deportation is a civil matter, not a criminal one. Reentry after deportation and overstaying a final removal order are both considered criminal acts, but the U.S. government historically has rarely prosecuted undocumented immigrants. Under current tax law, ICE requires a court order to request tax information to locate people, according to the Tax Law Center.
“They’re basically using [the criminal prosecution] exception to get this information, we think, for another purpose: to locate people so they can deport them,” said Kirkpatrick. The ICE-IRS agreement feeds into the administration’s overall data-gathering strategies. “They can cross-reference all of that data and develop targets, lists of people that they suspect of being in the country without authorization, and then they can go after them as part of their mass deportation agenda,” said Kirkpatrick, and the remittance tax could be one of those data points. “People are right to be concerned that every one of these data-gathering points is going to somehow be fed into the government data-collection system and then accessed by ICE in aid of the mass deportation agenda.”
Amid a flurry of phone calls and WhatsApp messages about potential ICE raids in the area, Valentina, Tania and their sister Lisa packed their gifts into a cardboard box three feet high by two feet wide. They sheathed the ends in packing tape and climbed on top to tamp down the contents. To guarantee the box’s safe passage, the sisters paid a specialized package service, recommended by friends, for door-to-door delivery.
“It sometimes happens that they take the things out somewhere. Things get lost along the way. They’ve told us that with these people, the things arrive intact,” Valentina told me. “Because we send things that are kind of expensive, we always have that fear that they won’t arrive.”
A man arrived later that afternoon to wheel the box out to a shipping container loaded with identical packages. In two to three weeks, he would personally deliver the package to their family’s doorstep in rural Honduras. Up north, the three sisters kept working, with threats of deportation hanging over their families as they continued to send money home.
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