Trump Sues IRS, Treasury for $10 Billion for Tax-Return Leak (2)

President Donald Trump sued the US Treasury and Internal Revenue Service for at least $10 billion over an unauthorized disclosure of his tax returns to the press during his first term in office, potentially putting American taxpayers on the hook for a massive payout.

The suit was filed Thursday in Miami federal court by Trump, his sons Donald Jr. and Eric, and the Trump Organization, which manages the president’s real estate holdings. Trump had long criticized the IRS for allegedly working to undermine him for political purposes.

Trump’s lawsuit revisits a clash that took center stage weeks before the 2020 election, when the New York Times published an explosive report on Trump’s tax records that was based on leaked IRS data. Former IRS contractor Charles Littlejohn pleaded guilty to stealing Trump’s tax data and leaking it to the Times. He also stole tax records for thousands of other wealthy Americans, including Ken Griffin, Elon Musk and Jeff Bezos, which he leaked to ProPublica.

The IRS and Treasury “had a duty to safeguard and protect plaintiffs’ confidential tax returns and related tax return information from such unauthorized inspection and public disclosure,” Trump’s lawyer, Alejandro Brito, said in the suit. “Accordingly, defendants were obligated to have appropriate technical, employee screening, security, and monitoring systems to prevent Littlejohn’s unlawful conduct.”

The lawsuit by a sitting president against the government he leads puts Trump in a highly unusual position in the case. Loyal administration officials at the Justice Department could ultimately decide whether to move to settle the case, and for how much.

The Treasury did not immediately respond to a message seeking comment. Neither the New York Times nor ProPublica immediately responded to messages seeking comment. The news outlets are not accused of wrongdoing.

$50 Billion

The filing adds to a series of lawsuits brought by Trump or his sprawling real estate empire over the past year that have targeted news outlets and banks, including JPMorgan Chase & Co., which he sued last week. Total damages being sought in all the cases now top $50 billion.

According to the New York Times report, the IRS records showed that Trump, who lost the election to Joe Biden in 2020, had paid $750 in federal income taxes in 2016 and 2017, and no taxes in 10 of the previous 15 years, because of large losses that offset any profits.

The Times report said that many of Trump’s businesses were struggling, with the president putting more money into the firms than he was taking out, and that he earned millions abroad during his first term in the White House.

At the time, Trump dismissed the reporting as “totally fake news.”

The report also led to a multi-year saga in which Democratic lawmakers sought to make Trump’s closely held tax information public.

Littlejohn was sentenced to five years in prison in January 2024, after admitting he’d gone to work at the IRS with the goal of accessing Trump’s tax data. His lawyer told the judge at the sentencing hearing that Littlejohn acted out of a “deep, moral belief” that Americans had a right to the information.

Earlier this week, Treasury said it canceled $21 million of contracts with Booz Allen Hamilton, where Littlejohn worked, alleging the consulting firm failed to protect taxpayer data to which it had access. The IRS has determined that 406,000 taxpayers were affected by the breach that occurred between 2018 and 2020, the Treasury said.

After Treasury canceled its contracts, Booz Allen said it looks forward to discussing the matter with the Treasury and distanced itself from Littlejohn. The company said it supported the investigation and that its assistance led to his prosecution. The company also said that Littlejohn’s criminal conduct occurred on government systems, not Booz Allen’s.

Other Lawsuits

Trump’s new case against the IRS follows a wave of lawsuits filed by Trump in his personal capacity seeking damages for alleged wrongs. He accused JPMorgan and Capital One Financial Corp. of illegally “de-banking” him or his real estate business for political reasons. He’s also filed defamation cases against the New York Times, the Wall Street Journal and the British Broadcasting Corp., all of which deny wrongdoing. Trump’s suits against broadcasters ABC and CBS settled for a total of $31 million.

The IRS isn’t Trump’s only government target in court. The president previously indicated he was seeking hundreds of millions of dollars in compensation from the US Justice Department through an administrative claim process. He claims the department violated his rights with investigations into whether his 2016 presidential campaign colluded with Russia in connection with the 2016 election and his post-presidential retention of classified documents.

Trump has repeatedly remarked on the unusual situation his claim against DOJ would create — with senior Justice Department officials who work for him would be deciding whether or not to pay the damages — framing the situation as negotiating with himself. The president has pledged not to personally retain a settlement he won from taxpayers over the Justice Department’s conduct.

“As I get money from our country, I’ll do something nice with it, like give it to charity or give it to the White House while we restore the White House,” Trump said last year.

The case is Trump v. Internal Revenue Service, 26-cv-20609, US District Court, District of Southern Florida (Miami).

(Updates with details on other lawsuits Trump has filed, and his damage claim to the US Justice Department.)

--With assistance from Justin Sink.

To contact the reporter on this story:
Erik Larson in New York at elarson4@bloomberg.net

To contact the editors responsible for this story:
Ben Bain at bbain2@bloomberg.net

Steve Stroth, Peter Blumberg

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