When IRS info is shared with law enforcement
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We begin with people in the U.S. illegally who pay taxes. I'm David Brancaccio in Los Angeles. More now on the government that's moved to give immigration officials access to IRS records. The Trump administration wants to use tax info to find people under deportation orders or have committed crimes. This blurring of a traditional boundary is reportedly the reason one of the acting heads of the IRS quit the other day.

Critics say sharing IRS info like this is illegal and could cost the government tens of billions of dollars in tax revenue if people see being in the tax system as a new liability. Marketplace's Nova Safo has more. For the last 15 years, Itzel Ramirez, who runs a tax preparation service in Milwaukee, has helped clients stay current with the IRS by filing with ITINs, a special Social Security-like number the agency created for foreign nationals.

All the time I say, do your taxes. It's good for you. The prevailing wisdom in immigrant communities has been that filing taxes can help efforts to remain in the U.S., at minimum by showing proof of residency and responsible behavior.

But this tax season, Romira says she's processed about half as many filings as usual, hundreds less. This year, the people say, no, I don't want it because maybe IRS shared the information with ICE, or no, because for what I need to do that...

Experts worry that the ICE-IRS data sharing pact will lead to unintended consequences just like this.

and the costs to America's bottom line could be steep. Natasha Sarin is with the Yale Budget Lab. Unauthorized immigrants pay about $66 billion in federal income and payroll taxes, and another about $30 billion in state taxes. If more undocumented immigrants stop filing and begin working outside of the traditional payroll system— many use fake, borrowed, or stolen Social Security numbers—

You're going to see a $25 billion increase, we estimate, in the

in the tax gap. Beyond economics, Michael Kircher of NYU's Tax Law Center says there's a humanitarian concern as well. IRS data simply is not designed for law enforcement purposes, and he's worried about false positives. The IRS might confirm that somebody with a given name lives at a particular address only for them to be an entirely unrelated person.

but still end up sort of being detained because, for example, they have a common and similar name. In addition, the IRS does not update addresses in real time between tax filings, so those could be wrong as well.

Experts also question whether the Trump administration's data-sharing plan is lawful in the first place. It breaks a precedent that at least from 1976. Nina Olson was the national taxpayer advocate and now heads the nonprofit Center for Taxpayer Rights.

1976 is when Congress passed a law explicitly limiting the sharing of taxpayer data. Up until this year, the IRS's position had always been, we do not share information with ICE or DHS unless there is a specific investigation specific to that person going on and there has to be a court order requiring it.

The IRS did not provide us with an interview, but the Trump administration has said its data sharing plan is legal and limited to specific criminal cases. So far, there is no lawsuit challenging that claim. I'm Novosafo for Marketplace. The Federal Reserve checks in with businesses region by region, and the resulting report, called the Beige Book, finds a steady economy despite all the policy uncertainty. But among warning signs uncovered, what's happening to tourism in the U.S.?

The tourism warning signs are sprinkled throughout the Beige Book, which includes anecdotes from the businesses around the 12 regional Fed banks. The Philadelphia, New York and Boston Feds say tourism from Canada was down considerably. The Minneapolis Fed says a North Dakota retailer reported a deep impact from that, with first quarter revenues down 7%. The Atlanta Fed says airlines reported a notable decline in foreign passengers flying into the U.S.,

The April Beige Book was released yesterday in preparation for the Fed's next meeting on interest rates in early May. I'm Nancy Marshall-Genzer for Marketplace. After the S&P stock index went up 1.7 percent yesterday, index futures are down this morning amid conflicting information about holding fast or easing off tariffs. S&P and Nasdaq futures are down two-tenths percent each. Thirty-year fixed-rate mortgages pretty steady in the last week, still under 7 percent on average.

As

As many as 80% of the toys we buy in the U.S. are manufactured in China. Big players were shifting more production into countries like Vietnam and India even before the trade war, says independent toy industry analyst Chris Byrne. The challenge with that is capacity, infrastructure, availability of labor, and the ability to do some of the more sophisticated manufacturing

that Chinese factories have been perfecting for decades. The trade war will likely speed up the shift to those other countries, but not in time to save the industry's busiest sales season. Planning for this holiday season is absolute chaos right now.

James Zahn with the trade publication The Toy Book says American retailers have canceled orders, manufacturers have halted production in China, and shipments of finished toys aren't leaving the country since steep tariffs went into effect. This is deja vu to the pandemic in the worst way.

Every day you are stopped, that creates a several-day ripple in the supply chain. By Halloween, Zahn predicts we'll start to see much higher prices and empty shelves in the toy aisle. I'm Savannah Peters for Marketplace. And in Los Angeles, I'm David Brancaccio. This is the Marketplace Morning Report from APM American Public Media.

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