The IRS issued an apology Tuesday to tens of thousands of American millionaires whose taxpayer data was stolen by an agency contractor and then leaked to a news outlet to embarrass them. The IRS said the government “failed” them.
The apology was part of a lawsuit filed by Kenneth Griffin, founder of Citadel Securities, a Wall Street giant responsible for one-fifth of stock trades in the U.S.
Mr. Griffin and the IRS agreed to close his lawsuit after the tax agency’s mea culpa.
“The Internal Revenue Service sincerely apologizes to Mr. Kenneth Griffin and the thousands of other Americans whose personal information was leaked to the press,” the agency said in an unattributed statement.
The IRS heaped blame on Charles Littlejohn, the contractor who was sentenced to five years in federal prison for stealing the wealthy taxpayers’ data. He also stole and independently leaked President Trump’s tax information.
Littlejohn “violated the terms of his contract and betrayed the trust that the American people place in the IRS,” the agency said, though it did accept some of the blame.
“The IRS takes its responsibilities seriously and acknowledges that it failed to prevent Mr. Littlejohn’s criminal conduct and unlawful disclosure of Mr. Griffin’s confidential data. Accordingly, the IRS assures Mr. Griffin and the other victims of Mr. Littlejohn’s actions that it has made substantial investments in its data security to strengthen its safeguarding of taxpayer information,” the agency said.
Mr. Griffin, whose net worth is estimated at $37 billion, said the outcome was a victory for taxpayers.
“I am grateful to my team for securing an outcome that will better protect American taxpayers and that will ultimately benefit all Americans,” he said in a statement.
In court filings, Mr. Griffin said he was proud of his success and of paying “his fair share of taxes.” The Pro Publica report that published information about Mr. Griffin’s reported income said he paid a 29.2% federal income tax rate from 2013 through 2018.
“Mr. Griffin apparently pays federal income taxes at a higher effective tax rate than many of the top wage earners in the United States,” his attorneys said.
In court filings, Littlejohn admitted that he took the job with an IRS contractor at least partly because he wanted to examine Mr. Trump’s tax information.
He considered himself a sort of Robin Hood, giving the public information he thought it had a right to see regardless of the law. Even after his conviction, he cast himself as a well-meaning crusader.
Prosecutors reached a deal with Littlejohn to plead guilty to one count of unauthorized disclosure of tax information. That deal enraged Republicans on Capitol Hill, who said it fell far short of the severity of Littlejohn’s theft. Reports said data was pilfered from as many as 70,000 people.
Littlejohn said his job gave him access to tax returns “at will.”
In court filings, he asked for leniency. He said a five-year sentence would hinder his ability to start a family with his girlfriend.
He is scheduled to be released from prison in July 2028.
Littlejohn leaked the Trump information to The New York Times and gave information about the others, including Mr. Griffin, to Pro Publica. That outlet published pieces revealing Mr. Griffin’s reported income, tax deductions and effective tax rate.
In his lawsuit, Mr. Griffin argued that the IRS ignored warnings about security lapses in its systems.
The agency issued its apology seven years after formally apologizing to tea party groups that the tax agency improperly targeted for intrusive scrutiny during the Obama administration.
The IRS said its apology was sincere.
• Stephen Dinan can be reached at sdinan@washingtontimes.com.
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