Trump family sues the IRS over unauthorized disclosure of tax returns by Charles Littlejohn
The lawsuit claims the IRS failed to protect confidential tax return data and seeks $10 billion in damages from American taxpayers for disclosures made by Charles Littlejohn, an IRS contractor, to news organizations.
Holding
Not applicable. This is a filed civil complaint. No court ruling yet.
Why It Matters
Tests how far §6103 tax return confidentiality protections extend when the breach is internal.
Raises exposure risk for the IRS when contractors misuse authorized access.
Could set damage benchmarks under §7431 for large-scale disclosure cases.
Highlights systemic data security failures, not just individual misconduct.
Key Facts
Plaintiffs include Donald J. Trump, Donald Trump Jr., Eric Trump, and the Trump Organization.
Defendants are the Internal Revenue Service and the U.S. Department of the Treasury.
The complaint centers on disclosures by Charles Littlejohn.
Littlejohn accessed and copied unmasked tax return data while working as an IRS contractor.
He disclosed that information to media outlets, including the The New York Times and ProPublica.
Littlejohn later pleaded guilty to criminal charges related to unlawful disclosure of tax information.
Timeline
Littlejohn receives authorized access to IRS tax return databases.
He copies and removes large volumes of taxpayer data.
He discloses tax information to media organizations over an extended period.
Media outlets publish stories based on the disclosed tax returns.
Littlejohn is criminally prosecuted and convicted.
Plaintiffs file this civil action seeking damages and declaratory relief.
Statutory or Regulatory Framework
§6103, which requires the IRS to keep tax returns and return information confidential.
§7431, which provides a private right of action for knowing or negligent unauthorized disclosure of tax return information.
Privacy Act, 5 U.S.C. §552a, which governs federal agency recordkeeping and safeguards.
Arguments
Plaintiffs argued:
The IRS failed to implement reasonable safeguards to protect confidential tax data.
The disclosures were foreseeable given known weaknesses in IRS systems.
The government is liable for negligent and knowing violations of §6103.
The disclosures caused reputational, financial, and privacy harms.
Government position:
Not yet stated. The complaint initiates the case.
Forward-Looking Implications
Increased scrutiny of IRS contractor access controls.
Potential expansion of damages claims in tax data breach cases.
Greater compliance pressure on federal agencies handling sensitive taxpayer data.
More aggressive civil follow-on litigation after criminal disclosure cases.
Result
Case filed. No decision issued.
The Takeaway
The suit shifts focus from a rogue contractor to the IRS itself, arguing that systemic failures, not just individual misconduct, led to one of the most significant tax data leaks in recent years.
List of Citations
Internal Revenue Code §6103. Governs confidentiality of tax returns.
Internal Revenue Code §7431. Provides civil remedies for unauthorized disclosure.
Privacy Act, 5 U.S.C. §552a. Sets federal data protection and safeguard requirements.
While the leak was a clear breach of privacy, the real legal battle here isn’t just about the disclosure—it’s about the unprecedented conflict of interest created by the President essentially being both the plaintiff and the person in charge of the defendant agencies. It’ll be interesting to see if the court allows a settlement or if it forces an independent intervention to protect the Treasury.