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Smith, Ways and Means Republicans Introduce Legislation to Increase Maximum Penalties for Leaking Taxpayer Information

May 9, 2024 — Blog    — Oversight    — Press Releases   

The Taxpayer Data Protection Act follows the unprecedented leak of taxpayer information by an IRS contractor whose sentencing is unlikely to deter future bad actors.

WASHINGTON, D.C. – Following the leak of taxpayer information by an Internal Revenue Service (IRS) contractor, who has since been sentenced to the maximum penalty of just 5 years in prison and a $5,000 fine, Ways and Means Committee Chairman Jason Smith (MO-08), along with all Republican Members of the Ways and Means Committee, introduced the Taxpayer Data Protection Act (H.R. 8292). The bill increases the maximum penalty for the unauthorized disclosure of tax information to a fine in any amount upto $250,000, or imprisonment of not more than 10 years, or both. The legislation also clarifies that each taxpayer impacted by disclosed tax information counts as a distinct violation of the law. Unfortunately, the Department of Justice only charged Charles Littlejohn, the IRS contractor, with a single count of unauthorized disclosure even though thousands of taxpayers had their return information stolen, which limited the Judge to a maximum five-year sentence. This bill makes clear that each taxpayer with information disclosed constitutes a separate and distinct count of unauthorized disclosure.

“No American should fear that their sensitive tax information might be unlawfully disclosed to another party or made public without their consent. Increasing the maximum fine and imprisonment period for unauthorized disclosure of taxpayer information will help deter individuals from violating the trust of American taxpayers,” said Ways and Means Committee Chairman Smith. “The illegal disclosure of President Trump’s tax returns and thousands of Americans’ private tax information to The New York Times and ProPublica brought to light the need for more stringent penalties for the crime. This legislation takes vital steps to protect the integrity of the American tax system and ensures stark penalties if this happens again.”

Click here to read a one-pager on the legislation.

Additional Background:

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 tosentence the IRS leaker, Charles Littlejohn, to the maximum sentence allowed under the law.

September 2023: DOJ charged Charles Edward Littlejohn with one count of unauthorized disclosure of private tax information, despite him making two separate disclosures of thousands of Americans private taxinformation to two news organizations and admitting to obstruction of justice in his plea agreement.

March 2023: Chairman Smith called on Secretary Yellen to explain what she was doing to get to the bottomof the leak and provide Americans with an update. Secretary Yellen responded that she referred the matter to investigators.

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.

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.

September 2020: After President Trump’s confidential tax information was leaked to The New YorkTimes, the top Republican on the Ways and Means Committee raised concerns about the breach.

FlashbackProPublica previously received (and published) leaked taxpayer information from the IRS in 2012 that just so happened to include critics of the Democrat administration.

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