Johnson addressed the topic saying, "I don't doubt the federal government deserves to be sued. The problem is, we don't have $10 billion. My preference would be to do a robust investigation, find out who leaked those tax returns." He further elaborated that leaking confidential tax return information constitutes a federal crime, and those individuals should be held fully accountable under the law.
The legal action at the center of this matter was initiated last Thursday in a federal courthouse in Miami. Trump, accompanied by his sons Donald Trump Jr. and Eric Trump, as well as the Trump Organization, filed the lawsuit against both the IRS and the Treasury Department. The complaint alleges a failure on the part of these agencies to implement and maintain necessary administrative, technical, and physical protections safeguarding their systems and records against unauthorized disclosures.
According to the suit, these shortcomings led to the leak of sensitive tax information that surfaced between 2019 and 2020. As a remedy, the plaintiffs seek $10 billion in damages, a figure representative of the gravity and scale of the alleged breach.
The source of the leaks was identified as Charles Edward Littlejohn, a contractor working for the IRS who admitted to providing Trump's tax details, along with tax data from hundreds of thousands of affluent Americans, to news organizations The New York Times and ProPublica. Littlejohn has pleaded guilty to a charge of unauthorized disclosure of tax returns and has since been sentenced to the maximum prison term of five years in 2024.
In the aftermath of these developments, the Treasury Department responded by terminating 31 contracts valued at approximately $21 million with consulting firm Booz Allen Hamilton, the company employing Littlejohn when he accessed the confidential information.
The case is further complicated by the timing and nature of Trump's own financial disclosures. Breaking with longstanding presidential norms, Trump declined to release his tax returns during his 2016 campaign. Subsequently, a 2020 investigation spearheaded by The New York Times, utilizing the leaked tax data, revealed that Trump paid a mere $750 in federal income taxes in both 2016 and 2017, and had no federal income tax liability in 10 of the previous 15 years. These tax results were partly attributed to substantial business losses reported by Trump.
Legally, the Trump family's lawsuit hinges on a federal statute empowering taxpayers to seek recourse against the government for unauthorized disclosures made either knowingly or negligently. Typically, claims under this law must be filed within two years of the disclosure. However, the Trumps contend they were unaware that Littlejohn was the source of the leak until December 2024, when IRS notices were sent to Donald Trump Jr. and Eric Trump. They argue that this date should mark the beginning of the statute of limitations.
If the Trumps succeed in their lawsuit, any awarded damages would effectively be paid by taxpayers. This prospect has drawn criticism and concern about the unusual nature of a substantial public funds transfer potentially benefitting a sitting president and his family.
As the case develops, the competing issues of government accountability, data security, legal timeliness, and public resource allocation remain at the forefront of public and political discourse.