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WASHINGTON – President Donald Trump’s decision to file a $10 billion lawsuit against the IRS over leaked tax information is stirring a debate among legal experts. They are questioning the ethical and legal implications of a president initiating an aggressive legal battle against his own administration.
The lawsuit, which was submitted on Thursday in a Florida federal court, includes Trump’s sons, Donald Jr. and Eric, as co-plaintiffs. It argues that the unauthorized disclosure of their confidential tax records inflicted “reputational and financial damage, public humiliation, unjustly damaged their business reputations, misrepresented them, and adversely impacted their public image.”
In a 2024 case, Charles Edward Littlejohn, a former IRS contractor from Washington, D.C. linked with Booz Allen Hamilton—a defense and tech firm—was sentenced to five years in prison. He admitted to leaking tax data about Trump and others to media outlets between 2018 and 2020.
Although the specific outlets weren’t identified in the charges, the timing and context suggest connections to reports by The New York Times on Trump’s tax returns and ProPublica’s coverage of affluent Americans’ taxes. A 2020 New York Times article revealed that Trump paid only $750 in federal income taxes during his first year as president, and in some years, he paid none due to reported significant losses.
Legal specialists acknowledge that Trump’s grievance with the IRS is valid but question both the substantial damages sought and his choice to advance the lawsuit. The breach contravened IRS Code 6103, a stringent confidentiality law that offers legal recourse for leaked tax information, including a minimum compensation of $1,000 per unauthorized disclosure.
Given that Littlejohn also accessed tax records of other billionaires like Jeff Bezos and Elon Musk, this case might pave the way for other wealthy individuals to claim damages from the government over such breaches.
David Gair, a tax attorney with Troutman Pepper Locke in Dallas who represents individuals whose tax information was included in the Littlejohn leak, told The Associated Press that several clients have already reached out about bringing a potential claim against the government.
“People are saying, well, if he can do it, then why can’t I do it? And so I think you will have a lot more people filing similar lawsuits, thinking that they might be able to piggyback on what he’s doing.”
Amy Hanauer, executive director at the Institute on Taxation and Economic Policy, says a legal remedy has already been provided for the leak.
“The contractor who leaked this information has been imprisoned, the Trump administration’s Treasury Department canceled its contracts with the company that employed the leaker, and the IRS issued a rare public apology to taxpayers affected by the leak,” and the IRS has pledged to strengthen its data protection procedures as a result, Hanauer said.
She adds that “even if an unbiased judge rightly rejects Trump’s demands as preposterous, there is a great danger that the IRS would ‘agree’ to settle and pay out an enormous sum of taxpayer dollars to Trump.”
Trump, when asked by a reporter over the weekend how he will manage being on both sides of the lawsuit, referred to a previous complaint he filed against the Department of Justice seeking roughly $230 million in damages over investigations into his 2016 campaign’s Russia ties and the 2022 Mar-a-Lago classified documents case.
He added that he’s supposed to “work out a settlement with myself.”
“I think what we’ll do is do something for charity,” Trump said Saturday. “We could make it a substantial amount. Nobody would care because it’s going to go to numerous very good charities.”
A White House representative did not offer details on what organizations might receive any settlement money.
Individuals whose tax information has been leaked don’t have to prove compensatory damages, Gair noted, though Trump is also seeking punitive damages, changing the stakes.
Referring to the deals that Trump’s family business has inked since he won reelection, Gair said Trump may have a hard time showing real harm.
“It’s hard for me to believe that he really had any losses, but maybe,” Gair said.
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