Washington, D.C. – House lawmakers voted to strengthen the penalties for making an unauthorized disclosure of tax information to prevent the future theft and disclosure of Americans’ private tax information by passing the Taxpayer Data Protection Act on Tuesday. The measure, introduced by Ways and Means Committee Chairman Jason Smith (MO-08), comes after the leak of thousands of Americans’ tax information, including the tax returns of President Trump, by an Internal Revenue Service (IRS) contractor, who has since been sentenced to the maximum penalty of just five years in prison and a $5,000 fine.
Ways and Means Chairman Smith said:
“When Americans file their tax returns, they expect their personal data and tax information are confidential. But between 2017 and 2021, Charles Littlejohn, who worked as a contractor for the IRS, stole taxpayer information, and he stole a lot of it. He gave it to The New York Times and ProPublica, who published articles containing that confidential tax information about President Trump and other notable figures. Mr. Littlejohn then destroyed evidence and obstructed law enforcement investigations.
“Current law failed to deter Mr. Littlejohn from stealing and leaking private and sensitive taxpayer information. Moreover, the Department of Justice only charged Mr. Littlejohn with a single count of unauthorized disclosure of private tax information.
“Increasing the punishment for this crime will result in better deterrence for potential criminals, and fewer crimes of this sort being committed.”
Click here to read Chairman Smith’s full opening statement from today’s debate on the Taxpayer Data Protection Act.
Current law states that any violation for the unauthorized disclosure of tax information shall be a felony punishable by a fine in any amount not to exceed $5,000, or imprisonment of not more than 5 years, or both. The legislation increases the maximum penalty to a fine in any amount up to $250,000, or imprisonment of not more than 10 years, or both. The legislation also clarifies that each taxpayer impacted by an unauthorized disclosure of tax information counts as a distinct violation of the law.
Unfortunately, the Department of Justice only charged the IRS contractor who stole and subsequently leaked the tax information of thousands of Americans with a single count of unauthorized disclosure of tax return information. This limited the Judge to a maximum sentence of five-years imprisonment and a $5,000 fine. This bill ensures that every impacted taxpayer counts as a separate and distinct instance of an unauthorized disclosure.
Click here to read a one-pager on the legislation.
Additional Background:
September 2020: After President Trump’s confidential tax information was leaked to The New York Times, the top Republican on the Ways and Means Committee raised concerns about the breach.
June 2021: In response to the leak of confidential taxpayer information published by ProPublica that appeared to come from inside the IRS, Republican tax writers called for transparency and an investigation. Then Republican leader of the Ways and Means Subcommittee on Oversight, Rep. Mike Kelly (PA-16), demanded answers on the breach as well.
February 2023: Chairman Smith wrote a letter to the Treasury Inspector General for Tax Administration demanding an explanation for why Americans were still in the dark 19 months after the latest leak of taxpayer information.
March 2023: Chairman Smith called on Secretary Yellen to explain what she was doing to get to the bottom of the leak and provide Americans with an update. Secretary Yellen responded that she referred the matter to investigators.
September 2023: DOJ charged Charles Littlejohn with one count of unauthorized disclosure of private tax information, despite him making separate disclosures of thousands of Americans’ private tax information to two news organizations, and admitting to obstruction of justice in his plea agreement.
January 2024: Ways and Means Republicans sent a letter to Judge Reyes, the Judge who oversaw Charles Littlejohn’s case in the U.S. District Court for the District of Columbia, respectfully asking the Judge to sentence the IRS leaker to the maximum sentence allowed under the law.
May 2024: The Taxpayer Data Protection Act passed out of the Ways and Means Committee on a bipartisan basis, 40-1.
Flashback: ProPublica previously received (and published) leaked taxpayer information from the IRS in 2012 that just so happened to include critics of the Democrat administration.
READ: Ways & Means Republicans: “Throw the Book” at IRS Leaker
READ: Ways and Means Republicans Demand DOJ Answer for Inadequate Charging Decisions for ProPublica Leaker