Treasury rips up Booz Allen contracts after Trump tax data leak

The US Treasury Department has canceled all of its contracts with Booz Allen Hamilton after a former contractor working on Internal Revenue Service projects stole and leaked the tax records of President Donald Trump and hundreds of thousands of other taxpayers.

The Treasury said Monday it is terminating 31 contracts with Booz Allen totaling about $4.8 million in annual spending and $21 million in total obligations, including work that gave the firm access to confidential IRS data.

The move comes years after the prosecution of Charles Edward Littlejohn, who was sentenced in January 2024 to five years in prison after pleading guilty to a single count of disclosing tax return information without authorization.

“President Trump has entrusted his cabinet to root out waste, fraud, and abuse, and canceling these contracts is an essential step to increasing Americans’ trust in government,” Treasury Secretary Scott Bessent said in a statement. “Booz Allen failed to implement adequate safeguards to protect sensitive data, including the confidential taxpayer information it had access to through its contracts with the Internal Revenue Service.”

According to Treasury and the IRS, the data breach affected about 406,000 taxpayers. Media reports from CNBC, Reuters, and other outlets identified some of those whose information was exposed as Trump and billionaires Jeff Bezos and Elon Musk, along with a wide pool of other ultra-wealthy Americans.

Documents from the Justice Department describe a methodical, multi-year operation. While working as a government contractor at the IRS, Littlejohn used broad search parameters on an IRS database to access tax returns tied to what prosecutors called a “high-ranking government official” and related entities, masking the true purpose of his queries.

He then bypassed internal safeguards meant to flag large data transfers and saved the returns to personal storage devices, including an iPod, before sending them to a news outlet that later published a series of stories on the official’s taxes.

Prosecutors said that in 2020, Littlejohn separately stole tax return information for thousands of the country’s wealthiest individuals and provided that data to a second news organization, which published more than 50 articles based on the leaked material. He later deleted and destroyed evidence in an effort to obstruct the investigation.

News reports Monday indicated that he divulged the information to the New York Times and Propublica, which in 2021 published an expose of the means by which the wealthiest individuals avoid income tax. At the time, it was unclear how the news outlet came upon the IRS data underpinning its story.

Booz Allen’s shares fell more than 10% after the Treasury announcement.

In a statement, the firm said it “has zero tolerance for violations of the law and operates under the highest ethical and professional guidelines,” adding that the criminal conduct occurred on government systems and that the company stores no taxpayer data on its own networks.