President Donald Trump, along with his two eldest sons and the Trump Organization, have filed a lawsuit against the IRS and the U.S. Department of the Treasury seeking at least $10 billion in damages for the unauthorized disclosure of their confidential tax returns, a move that has drawn skepticism from former government officials.
The January 29 complaint comes in the wake of the criminal conviction of former IRS contractor Charles Littlejohn, who is serving a five-year prison sentence for leaking the tax data of thousands of Americans to news organizations.
Littlejohn Disclosures
The lawsuit is the latest development in the continuing fallout from the massive data breach perpetrated by Charles Littlejohn, who worked as a government contractor for Booz Allen Hamilton. According to the Department of Justice, Littlejohn sought employment as an IRS contractor with the specific intention of accessing and disclosing tax returns.
Between 2018 and 2020, Littlejohn used his access to statutorily protected taxpayer data to disclose the tax information of a “high-ranking government official,” later identified as President Trump, to the New York Times. He also leaked the tax data of thousands of the nation’s wealthiest individuals to ProPublica. Both outlets ran coverage based on the disclosed information.
The breach has led to other lawsuits already. Citadel CEO Ken Griffin, one of the individuals whose data was included in the tranche provided to ProPublica, filed a similar complaint against the IRS. That case was settled in June 2024 after the IRS issued a public apology to Griffin “and the thousands of other Americans” affected by the breach. Recently, the Treasury Department announced it was canceling all 31 of its contracts with Booz Allen Hamilton, accusing the firm of failing to implement adequate safeguards to protect the sensitive taxpayer data it could access.
In Littlejohn’s sentence appeal, Booz Allen filed an amicus brief supporting the government and reiterating that Littlejohn acted on his own volition.
A Valid Claim or Conflict of Interest?
In the complaint filed in the U.S. District Court for the Southern District of Florida, the Trump plaintiffs allege that the IRS and Treasury willfully failed to safeguard their data and violated federal law, including the confidentiality protections under IRC § 6103. The suit argues that Littlejohn, though a contractor, acted as a “joint employee” because the IRS exercised “extensive, detailed, day-to-day supervision” over his work, making the government liable for his actions.
Trump seeks statutory damages under IRC § 7431 based on the theory that every individual who viewed the leaked information in news articles constitutes a separate, $1,000 disclosure, resulting in a claim of at least $10 billion.
However, a group of former high-ranking government officials and public interest groups filed an amicus brief February 5 challenging the suit’s core claims. The group, which includes former IRS Commissioner John Koskinen and former National Taxpayer Advocate Nina Olson, argues the lawsuit contains “significant legal flaws” and risks becoming “collusive litigation,” as the President is suing the government he presides over.
The brief directly counters the complaint’s central arguments, contending that the claim is time-barred because it was filed more than two years after the disclosures were widely publicized in 2020. The amicus brief also asserts that the suit targets the wrong defendant, arguing that under § 7431, claims against a non-employee like Littlejohn must be brought against him directly, not the federal government.
Finally, the former officials describe the $10 billion damages calculation as “legally and factually unsupported, and unprecedented.”
Larger Implications
The high-profile nature of the Trump lawsuit could inspire a wave of similar litigation from others whose data was compromised, but they are likely to face legal hurdles, according to Troutman Pepper Locke Partner David Gair. “I think a lot of people are probably looking at the Trump lawsuit and thinking, ‘Hey, maybe I need to get onto this bandwagon and file my own lawsuit,'” Gair told Checkpoint, hinting at a possible rise in “copycat lawsuits.”
But Gair cautioned that these plaintiffs would struggle to prove they suffered financial harm. “All those people are going to have similar issues … especially when you’re talking about actual damages,” he said. He explained that a successful claim typically requires a clear link between the disclosure and a specific financial loss, such as a lost business contract.
In Trump’s case, Gair noted that reports suggest his net worth has increased since the leaks, making a claim of financial harm particularly difficult to substantiate. “I just don’t know if the facts would support a situation like that for him. It seems like it’s the opposite,” Gair stated.
Gair added that, if successful, the suit would take funds from an agency already beset by cuts and workforce reductions. “[T]he IRS has lost tons of funding, and lots of employees have left” as a result of the Department of Government Efficiency’s involvement in various government agencies last year. “So there’s just a lot less people doing a super important job. It’s hard to build roads if you don’t have funds going into it.” Gair said the IRS should be revitalized and again function as an “organization that all of us as Americans can be proud of.”
For more on § 6103 protections, see Checkpoint’s Federal Tax Coordinator 2d ¶ S-6200.
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