The Immigrant Council has said comments by Independent TD Noel Grealish that €10 billion has been sent abroad over the last eight years are "shameful".
The council said that remittances are an essential part of migration and part of the Irish experience for generations.
Mr Grealish's comments were branded as "racist" after he made the remarks in the Dáil.
The Galway West TD told the Dáil that the money has been sent to countries such as Poland, Nigeria, the UK and France.
He asked if Revenue or the Department of Finance had any way of tracking where this money was coming from.
Amid palpable tension in the Dáil chamber, Solidarity-PBP TD Ruth Coppinger said the question was an example of disgraceful racism.
Taoiseach Leo Varadkar said he did not know where Mr Grealish was going with this question and that Irish people had always historically sent money home from the US.
A spokesperson for the Immigrant Council said that that Mr Grealish's comments "seems to be ungrounded and based on an uneducated interpretation of out of context information".
The spokesperson said that "scrutinising only one group of migrants for what all migrants do, including Irish living abroad, is shameful".
She said the Taoiseach's reaction was "to be applauded".
Questions by independent TD Noel Grealish about personal remittances sent from Ireland to countries both within and outside the EU have led to controversy in the Dáil. | https://t.co/JEA9BtWRmb pic.twitter.com/A3noowN7Xn— RTÉ News (@rtenews) November 12, 2019
Mr Grealish asked if there were mechanisms in place to ensure that the remittances leaving Ireland are fully accounted for and that they are not the proceeds of crime or fraud.
He said that he could understand transfers to other EU countries, but €3.4bn transferred to one non-EU country was astronomical.
The Taoiseach said for many decades Irish people went all over the world and sent their remittances back to Ireland.
"I remember my grandmother, all of her family went to America, telling me about the cheques coming from the States," Mr Varadkar said.
He also picked up on Mr Grealish's apparent distinction between money going to EU countries and non-EU ones.
The Taoiseach said hospitals here are full of doctors, nurses and midwives from India, the Philippines, Egypt, Pakistan and other countries.
He said these people work hard, and out of their post-tax income they send some money home to families who probably paid for their education.
Responding, Mr Grealish said a lot of the money is genuine money but there has to be controls to monitor it.