A former IRS contractor has pleaded guilty to leaking the tax return information of many of the nation’s wealthiest individuals to media organizations.
Charles Littlejohn, 38, of Washington, D.C., is scheduled to be sentenced January 29, 2024, and faces up to five years in prison.
In a release announcing the October 12 plea, the Justice Department said Littlejohn accessed tax return information associated with a “high-ranking government official” and saved the tax returns to multiple personal storage devices, including an iPod.
Prosecutors said the returns were accessed from an IRS database after the contractor used “broad search parameters designed to conceal the true purpose of his queries” and was able to evade IRS protocols for preventing or detecting the downloads.
Littlejohn shared the tax return information with a news organization in 2019, leading to a series of stories being published in September 2020. The timeline suggests that the government official was former President Trump and the news organization was The New York Times.
Littlejohn also stole tax return information for “thousands of the nation’s wealthiest individuals” in July and August 2020 and shared it with another news organization, believed to be ProPublica. That information covered more than 15 years of tax data, revealing details about the individuals’ income and tax liabilities — or lack thereof.
Littlejohn obstructed an investigation by the Treasury Inspector General for Tax Administration into his conduct by deleting and destroying evidence of his disclosures, according to the Justice Department.
Both leaks have haunted the IRS to this day. Critics of the agency in Congress have regularly brought up the leaks, questioning whether the agency is satisfactorily protecting taxpayer privacy, and using them as evidence that the IRS can’t be trusted.
Before the leaks, the IRS “had a sterling reputation for protecting privacy,” Andy Grewal of the University of Iowa College of Law told Tax Notes. For a while, at least, the IRS stuck out as one of the few federal agencies that wasn’t routinely leaking sensitive matters about the Trump administration, he said.
“The ProPublica leak marred the IRS’s reputation in this respect,” Grewal continued, adding that he was relieved to see that it was a contractor who was responsible, not an IRS employee. Still, that “raises obvious questions” about how the agency manages information sharing with third parties, he said.
A Government Accountability Office report released September 11 found that while the IRS took taxpayer privacy training of its employees seriously, similar training among the agency’s contractors was far less thorough, such that it “presents risks to taxpayer information.” In response, the IRS said it plans to centralize oversight of contractors in an enterprise contract oversight center.
Marjorie Rollinson, President Biden’s IRS chief counsel nominee, addressed concerns from Senate Finance Committee members on the issue as well.
In written answers to the committee released October 12, Rollinson said she would “help ensure that Congress is kept appropriately apprised of new protocols and protections regarding the security of IRS IT systems” if confirmed.
“I look forward to learning more about the IRS’s current approach to training and education on section 6103, section 7213, and section 7213A and to seeing where improvements can be made,” Rollinson said.