The move follows the improper access to confidential taxpayer information by consulting firm Booz Allen Hamilton, the department said
The U.S. Treasury Department has canceled contracts with a consulting firm after a former contractor was indicted and jailed for leaking confidential tax information, including that of President Donald Trump.
The department said Monday it has terminated all contracts with Booz Allen Hamilton, a major defense and national security technology firm, following a data breach involving a former employee that occurred between 2018 and 2020. The move affects 31 active contracts worth a total of about $21 million.
The case centers on Charles Edward Littlejohn, a former US Internal Revenue Service (IRS) contractor who worked for Booz Allen Hamilton. In 2024, he was sentenced to five years in prison after pleading guilty to leaking tax information to the news media, including records related to Trump and other wealthy individuals. Some of the documents later reached the media, such as the New York Times, which published several stories based on the records in 2020 and 2021.
The leaks, which prosecutors described as “unprecedented in IRS history,” roughly 406,000 taxpayers were found to be affected. The records spanned more than 15 years and included tax returns, investment holdings, stock trades and other financial details. While high-profile billionaires were affected, some ordinary taxpayers connected to certain investment entities were also affected.
Finance Minister Scott Bessent said Booz Allen had failed to implement adequate safeguards to protect data. “President Trump has tasked his Cabinet with rooting out waste, fraud and abuse, and canceling these contracts is a critical step in increasing Americans’ trust in government,” he declared.
The company said it does not store taxpayer data in its systems and cannot monitor government networks. A Booz Allen spokesman told CNN that the firm strongly condemns Littlejohn’s actions and maintains a zero-tolerance policy for violations of the law. Booz Allen maintains contracts with other federal agencies, including the Department of Defense, Homeland Security and Intelligence.
The move by the Treasury Department comes with the start of the 2026 tax filing season in the US. Since the breach, federal requests for access to the data, including those from Elon Musk’s now-defunct Department of Government Efficiency (DOGE), have raised questions about the IRS’s privacy practices.
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